Marmoush was forced off after just nine minutes of Egypt's World Cup qualifier against Burkina Faso on Tuesday.
The 26-year-old is travelling back to Manchester for further assessment, but City have confirmed that initial scans have revealed the injury is serious enough to rule him out of United's visit to the Etihad Stadium on Sunday.
A club statement issued on Wednesday read: "Manchester City can confirm that Omar Marmoush has sustained a knee injury whilst on international duty with Egypt.
"The City striker suffered the injury in the early stages of Egypt's World Cup qualifying match with Burkina Faso on Tuesday evening.
"Initial results on a scan performed in Egypt indicate he will not be available for the Manchester derby on Sunday, and he will now return to Manchester for more assessment and to begin his rehabilitation."
It's a further blow for City boss Pep Guardiola, who is already dealing with a mounting injury list.