Cheika revealed the cruel injury blow after the Wallabies arrived in Japan on Sunday ahead of Saturday's third Bledisloe Cup clash with the All Blacks in Yokohama.

Utility back Hodge, who has played all nine of Australia's Tests so far in 2018, is expected to be off his feet for at least two months, with Cheika yet to decide on a replacement for the four-match tour.

Prop Angus Cottrell is also out of Bledisloe selection contention after straining a medial ligament, but he will remain with the squad and is expected to be available for the European Tests against Wales, Italy and England.

Hodge also suffered his injury in training in what Cheika described as "shock to the system" for a Wallabies squad alarmingly already low on specialist outside centres.

Hodge has worn the gold No.13 jumper in Australia's past six Tests in the absence of injured regulars Tevita Kuridrani and Samu Kerevi, who only made his comeback from a biceps tear during Saturday's Byron Bay Sevens.

Kerevi will join the touring squad in Japan and may be rushed back into an international return at least via the bench against the All Blacks.

"He got two (sevens) games under his belt. He's on his way up here, he's had a good block of training and, yes, he'll be a little bit underdone. But he's got a lot of experience as well," Cheika said.

"So we'll try and build him up as the tour goes on and we'll decide once he arrives and when he gets on the training paddock whether or not he's in condition to at least play some part this week."

Israel Folau and Jack Maddocks appear to be Cheika's most obvious options to replace Hodge at 13 for the All Blacks showdown, while a shock recall for veteran Adam Ashley-Cooper at some point during the tour is not out of the question.

The Japan-based Ashley-Cooper is very much on Cheika's radar after announcing he hopes to return to Australia for the 2019 Super Rugby season in a late bid for inclusion in a fourth World Cup campaign next year.

More immediately, Cheika is challenging his under-performing Wallabies to start living up to the "extraordinary potential" that Rugby Australia chairman Cameron Clyne claims they possess.

"Cameron's shown what he sees in the team and that he believes in the team and I agree with him," Cheika said.

"(But) what we know for sure is that potential doesn't win trophies, doesn't win championships.

"And the players know that as well, so it's not like we're saying something out of school.

"Our job (as coaches) is to harness that to make sure that it's coming out and being seen on a regular basis - and for longer in games."

Australian Associated Press