McHugh underwent a scan in Letterkenny on Wednesday after being carried off late in the Ballyshannon game.
The Donegal star has been told that the injury will rule him out for "three to four weeks".
First up, the Kilcar man will miss Donegal's concluding Division One round robin game against Mayo on Sunday.
A Donegal victory in Castlebar will guarantee them a place in the Division One final if Monaghan fail to beat Dublin at Clones.
McHugh will also be ruled out of the Division One decider on Sunday week if Donegal are involved.
However, the 2016 Allstar should be back fit for Donegal's Ulster Football quarter-final against Antrim on 21 May.
The Kilcar man underwent treatment at Ulster University Jordanstown campus on Monday which included a session in the campus' hydro pool.
McHugh has been Donegal's most impressive performer during the Football League.
Such have been his recent displays, some people now view McHugh as being as crucial to Donegal's fortunes as captain Michael Murphy.
McHugh is understood to have sustained the injury which his foot got caught a rut on the Ballyshannon pitch.
Donegal's Ryan McHugh will miss the remainder of the Football League after suffering an ankle tendon tear in Sunday's draw against Monaghan.