The 33-year-old ex-Malaga man, who played for Portsmouth last season, was driving his car in Montevideo on Sunday but lost control and hit a column of street lights. He was placed in a medically-induced coma.
Doctor Mario Canela, of La Espanola hospital, explained the surgery was "to amputate the leg from the knee down".
He added: "Silva's situation is absolutely not solved with the amputation. We are worried about a possible infection."
Silva played 49 matches for Uruguay, scoring 15 goals, including the 2002 World Cup finals in the Far East.
He was without a club, having left Pompey in February.
Horrible news.