The 32-year-old number eight sat out the Wallabies' 32-25 win over Argentina on Saturday after suffering concussion symptoms in the narrow win over South Africa the previous week.
Palu has been plagued by injury in recent years and the Wallabies backroom staff advised him to take an extended break.
The news comes after the loss of hard-hitting hooker Tatafu Polota-Nau, who suffered an ankle injury against the Pumas, and will give coach Ewan McKenzie some headaches as he prepares his squad for two tough away fixtures against the Springboks and Argentina in the coming weeks.
On a more positive note, Australia expect to welcome back Will Genia from an ankle injury, while Sam Carter should also be available despite re-aggravating an ankle problem which sidelined him during the June series against France.
A win over the South Africans on September 27 will see Australia retain the Nelson Mandela Plate and leapfrog the Boks into second place in the world rankings