Barry, who has made four appearances for the Tigers since joining on loan in January, suffered damage to the cartilage in his knee and was forced to come off after just 41 minutes during the 1-0 victory at the Stadium of Light on Saturday evening.
Despite the injury, the Tigers remain hopeful he could yet feature for manager Ruben Selles' side again this season after joining them in January as an exciting loan prospect.
The Hull statement says: "Aston Villa loanee Louie Barry is set for a spell on the sidelines with a knee cartilage injury.
"The 21-year-old, who has made four appearances since joining in January, was withdrawn in the first half of Saturday’s 1-0 victory at Sunderland.
"The forward will return to his parent club Aston Villa to undergo rehabilitation, with the Tigers hopeful that he could feature for Rubén Sellés’ side again this season.
"We wish Louie all the best for his recovery."
Hull are 21st in the Championship and three points above the relegation zone with 12 games remaining, losing Barry is a huge blow and Selles may have to call upon some of the young members of the squad to step up and fill the hole he has left this campaign.
"We brought in Louie with the idea to be a player that will make the difference for us, so it's a big blow," head coach Selles told BBC Radio Humberside.
"We will manage as we always do."