Butker, who appeared on the team's injury report as a limited participant Thursday, needs arthroscopic surgery, sources told Schefter.
By going on IR, Butker will be sidelined for at least the next four games.
The team is signing kicker Spencer Shrader off the New York Jets practice squad to replace Butker on the 53-man roster, sources told Schefter.
Butker, in his eighth season with the Chiefs, is enjoying another strong season, converting 90% of his field goal attempts (18 of 20) and 95.5% of his extra points (21 of 22).