Group One-winning West Australian sprinter Barakey is expected to be out for six months after scans revealed he has fractured a knee.
Barakey suffered the first defeat of his career in last Saturday's Group One Newmarket Handicap (1200m) at Flemington when he beat just two runners home.
But on his return to Perth, scans revealed the Winterbottom Stakes winner required an operation on his knee.
He will have surgery next week.
It is hoped Barakey will be back in time for this year's Winterbottom Stakes (1200m), Perth's only Group One sprint, which is run in late November.
"He fractured a knee and needs to be operated on," Taylor told Racing Victoria.
"He's got to get over the trip first and then they will operate next week.
"I was certain when I saw how sore he was on Saturday night that there was something there.
"It's disappointing, but that's racing."
The injury capped a forgettable Melbourne preparation where things didn't go to plan for the horse that had won his first 11 starts in the west.
Barakey was set to run as favourite first-up in the Oakleigh Plate last month but was scratched at the barriers when he lunged forward and tried to burrow under the gates after another horse played up next to him.
It meant he had to go into the Newmarket Handicap first-up.