"We tried the conservative approach with his flexor tendon and unfortunately, it's not healing. So the decision was to repair that tendon," Reds head trainer Paul Lessard said.
A specific timetable for Bailey's expected recovery rehabilitation isn't yet known.
"He should be just about ready to go for Spring Training," Lessard said.
Bailey's season officially ended on Monday when he was transferred from the 15-day disabled list to the 60-day DL. He has not pitched since Aug. 7 and reported discomfort shortly after hitting in that game against the Indians.
The team attempted a platelet-rich plasma injection to help Bailey heal, but results of a recent MRI showed no great improvement. Surgery emerged as the most viable option.
"I'm certainly disappointed, typically that's a last resort, but also in this case it does help answer some questions," Reds manager Bryan Price said. "I think it may be the best way to go in the sense that we know there's going to be a timetable, I don't know the exact timetable right now, but there will be a timetable that we expect to have him back."
Had Bailey tried to continue with rehab and strengthening and delay having surgery, it could have caused him to miss part or all of the 2015 season.
"It seems to me to be the best option -- it's unfortunate we won't have him this year, but it does seem to suggest that we'll have him for the bulk, if not all, of next season," Price said.
The 28-year-old Bailey signed a six-year, $105 million contract in February. After a rough start to this season, he came on strong and finished with a 9-5 record and 3.71 ERA in 23 starts.
Reds reliever Jonathan Broxton had flexor mass tendon surgery in August 2013. Broxton started out behind in Spring Training and began this season on the DL. He also had a complete tear of the tendon. Bailey's situation appears less serious.
"Not as extensive, but very similar," Lessard said of Bailey's procedure.
Mark Sheldon is a reporter for MLB.com. Read his blog, Mark My Word, and follow him on Twitter @m_sheldon. This story was not subject to the approval of Major League Baseball or its clubs.