"It was devastating news for me," Murgatroyd tells PEOPLE exclusively of being told by her orthopedic surgeon that she requires a surgery that will sideline her "for six to eight weeks."
Having just come off a three-month, live DWTS tour, Murgatroyd "felt great" heading into rehearsals with her season 21 partner, Andy Grammer. But one day, after putting on her heels, she says she could tell "something was not right."
"I wanted to check it out properly and make sure I was good to go for the season," says the pro dancer, 29. "I Got my MRI results back and it was a really bad diagnosis. It showed I had 4 torn ligaments and a floating piece of bone at the back of my ankle. My doctor said I needed surgery and I knew I needed to put my health first if I want to keep dancing on the show into my 30s."
Murgatroyd says having to step back from DWTS has been "heartbreaking," but the worst part was telling her new partner the news.
"It was awful telling Andy. He had specifically asked to be partnered with me and I felt like I was letting him down," she says. "But he understood and has been a great guy about it."
Perhaps softening the blow of the news is Murgatroyd's plan to be in the rehearsal room as much as possible to assist Grammer's new partner (who will be announced Wednesday morning on Good Morning America) with choreography.
"I'm just looking forward to being back on my feet as soon as possible and being a part of the show again," says Murgatroyd, whose surgery is currently scheduled for mid-September. "I'm so in love with the show and I'm a very competitive person. It's really sad. It's super frustrating but I'm going to fine and I'm going to be back in week eight or nine of the show."
And even though they won't be gliding across the dance floor together any time soon, Murgatroyd says Grammer is still hoping they can continue building a friendship in the meantime.
"He told me, 'This week, can you and [boyfriend Maks Chmerkovskiy] and my wife and I go out to dinner? Let's just hang out and be cool friends," she says. "That was nice. I appreciated that."
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Season 21 of Dancing with the Stars premieres Sept. 14 (8 p.m. ET) on ABC.