Coach Dan Quinn made the announcement after Friday's practice. Freeman wasn't able to practice all week.
The running back was injured in a season-opening loss to Philadelphia, another blow to a team that also lost defensive stalwarts Keanu Neal and Deion Jones.
Neal went down with a season-ending knee injury, while Jones was placed on injured reserve with a foot problem.
The Falcons are hopeful that Neal will be able to return, but he will have to miss a minimum of eight games.
Freeman's injury came after he sat out the entire preseason in order to stay healthy.
That decision came after he was banged up repeatedly during the 2017 season, sustaining two concussions and a right knee injury.
Tevin Coleman will take over the starting spot.
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