The 25-year-old visited a surgeon on Tuesday morning. Although football manager Neil Balme is yet to see the surgeon's report, the club is resigned to losing him for three months.
"We're expecting the things to happen that we thought would happen," Balme told AFL.com.au on Tuesday afternoon.
"They'll probably do (the operation) pretty much straight away, I would think."
Varcoe injured his shoulder during the opening quarter of Geelong's win over Carlton at Eithad Stadium on Saturday night.
"It was a flush bump to the side and he dislocated his shoulder," Geelong physio Mike Snelling explained on CatsTV.
"It went back in while he was coming off."
The injury is a terribly disappointing result for the skilful and speedy onballer, who missed most of last season with a foot stress fracture.
It is a big blow to the Cats' premiership hopes as well.
Varcoe had shown many flashes of brilliance during Geelong's victories over Hawthorn and North Melbourne in the opening two rounds, his crumbing goal against the Hawks providing some gold for his personal highlight reel.
The Cats also have a number of other star players under fitness clouds.
Veteran midfielder James Kelly is a 50-50 prospect to make the trip to Sydney for the big clash against the Swans at the SCG on Friday night.
Kelly missed the win over the Blues after being unable to shake off a lower leg problem.
"We've been pretty conservative with James," Snelling said.
"He took a knock to his Achilles in training, then he subsequently played a full game with it (against North Melbourne in round two) and he pulled up a bit sore at the end of the game.
"So these sorts of things can turn into nasty Achilles problems if you let them.
"So we've … let him heal, and we have to test him this week and see how he goes."
Steve Johnson, who played his first game for the season against Carlton, is also battling to be fit to take on the reigning premiers.
"Stevie's left knee was operated on (just prior to round one) and his left knee came up beautifully post-game," Snelling said.
"But unfortunately he took a knock to his right knee, just near his knee cap on the bone, and it's quite bruised and swollen.
"So that's pretty sore after having played on it, but we anticipate he should get up for the game this week."
Midfielder Jesse Stringer will be sidelined for three weeks after straining his hamstring while playing for the Cats' VFL team on Sunday.
Adam McNicol covers Geelong news for AFL.com.au. Follow him on Twitter at @AFL_AdamMcNicol