Neymar, who has scored four goals in the tournament, will miss the semi-final against Germany in Belo Horizonte on Tuesday and the final should they progress.
He is expected to be out for several weeks.
“Unfortunately, he’s not going to be able to play,” said Brazil team doctor Rodrigo Lasmar.
“It’s not serious in the sense that it doesn’t need surgery, but he’ll need to immobilise it to recover,” Lasmar said after the player was taken straight to hospital from the stadium in Fortaleza.
Neymar, Brazil’s poster boy and one of the world’s most marketable players, has been driving his country’s bid for a sixth world title with his goals and creative talent.
He went down after a challenge by Colombia’s Juan Zuniga in the 88th minute and looked to be in considerable pain after what turned out to be a cracked third vertebra.
“It’s a normal action, I tried to shadow him,” defender Zuniga told reporters. “I was not thinking of hurting him. I was defending my country´s colours.”
“On the pitch I’m defending my shirt, my country, but I didn’t expect him to fracture a vertebra. He is a great talent for Brazil and for the world,” Zuniga said.
Neymar was taken straight to hospital as Brazilians across the country cheered their team’s success on home soil before the news of his injury put a damper on celebrations.
“We’ll miss him,” team mate Oscar said. “Whoever comes in his place has to play as part of the team and beat Germany. “The best thing we do is play as a team and I just hope that whoever comes in plays well,” the attacking midfielder said.
The 22-year-old, who plays for Spanish club Barcelona, had to be carried off on a stretcher and was replaced by defender Henrique for the final minutes of the game.
Brazil captain Thiago Silva, who will also miss the semi-final after being booked on Friday, refused to blame Zuniga for the injury.
“Zuniga is not a bad guy. But at that moment he wasn’t very prudent, he could have held up a bit, fouled in a different way.”
He said now was the time for Brazil players to come closer together and show even more solidarity on the pitch.
“In those times it is when the team shows its strength,” he said.
“Neymar is a very important guy for our group, we depend a lot on him. But potentially, this situation can mark a revolution for us, like ‘let’s win the Cup for Neymar’. This could help bring together the team even more,” he said,
Many Brazil fans had gathered outside the Fortaleza hospital, shouting “Forca Neymar” (be strong Neymar) as the player was being wheeled into the building.
Neymar also received support from the country’s president, Dilma Rousseff, who tweeted: “Like all Brazil I am one of those cheering from the sidelines for our star Neymar to get better.”
(Reporting by Elzio Barreto, Additional reporting by Andrew Downie, Todd Benson and Luis-Jaime Acosta in Bogota, Writing by Karolos Grohmann, editing by Ed Osmond and Nigel Hunt)