The 53-year-old Dire Straits frontman broke six ribs and his collarbone in a crash in central London on Monday.
He was riding his Honda motorcycle to rehearsals for a tour which starts next month in Portugal when he was involved in a collision.
A spokeswoman for St Thomas’ Hospital, Westminster, said Knopfler was brought into the accident and emergency department at 11.33am and left the hospital at 6pm.
“He has six broken ribs and a broken collarbone,” she said. “While he was with us, he was in a stable condition.” The singer’s agent said that he was spending yesterday recuperating.
“Unfortunately this means he will not be able to perform at the Royal Albert Hall on March 25 in aid of Teenage Cancer Trust with Eric Clapton.
“However, the show will still be going ahead with Eric Clapton,” said the agent.
Police were called to Grosvenor Road, Belgravia, at 10.49am on Monday by a member of the public.
A Scotland Yard spokeswoman said: “It is believed a red Fiat Punto car was in collision with a Honda motorcycle.
“The motorcycle rider, believed to be in his early 50s, was taken by ambulance to St Thomas’ Hospital, and it is believed he suffered broken ribs.”
The Fiat driver was not believed to have been hurt. The singer and guitarist is one of a number of celebrities who have been hurt in motorcycle crashes in recent years.
Film star Liam Neeson broke his pelvis while riding his Harley Davidson in the US in July 2000. He lost control after a deer leaped into the road and he hit a tree near his home in Washington, New York State.
Actor Keanu Reeves has had a number of serious accidents, including a near fatal crash in 1997 after which he was on crutches for several weeks.
Knopfler’s agents said any get well cards should be sent care of Mercury Records at 136-144 New Kings Road, London, SW6 4FX, England.