The news comes as a serious blow to Mexico's chances of winning a first gold medal in London, with Brazil already considered favourites for the clash.
Mano Menezes' team overcame South Korea in the semi-finals and have scored six goals in two games during the knockout stages.
"I'm very sad. I'm out of the final due to a muscle tear, now I just have to recover and support my teammates this Saturday," Dos Santos revealed on Twitter.
|UNDERDOGS TO TRIUMPH?
|5/1||Mexico are 5/1 to beat Brazil and win Olympic gold with Paddy Power|
Mexico were undefeated as they topped Group B, before seeing off Senegal in extra-time in the quarter-finals and coming from behind to beat Japan 3-1 to secure a place at Wembley.
Dos Santos will also have been hoping to impress new Tottenham manager Andre Villas-Boas, with his opportunities at White Hart Lane limited in recent seasons.