Holland will not pitch again this season.
He'll be examined next week by Neal ElAttrache of the Kerian-Jobe Orthapaedic Clinic in Los Angeles.
Royals manager Ned Yost said an MRI taken on Aug. 31 showed Holland had sustained a ligament tear in his right elbow.
"We discussed it at that point," Yost said. "He said, 'Look, it is what it is. I'm still functioning, I can still pitch, I can still get outs, I can still close games.' "
The Royals, riding a comfortable lead in the American League Central Division race, continued to use Holland as a closer for five more outings after the MRI.
But when Holland surrendered two runs in the 12th inning of a 5-4 loss in Detroit on Sept. 18, that turned out to be his last appearance.
"It just got a point where the kid is such a competitor, he's going to go until he can't go anymore," Yost said.
But the Royals could no longer afford an inconsistent closer, not with right-hander Wade Davis and a strong bullpen available.
Davis has moved into the closer's role and righties Kelvin Herrera, Ryan Madson and Luke Hochevar, lefty Franklin Morales and converted left-handed starter Danny Duffy will serve as the bridge between starter and closer. Right-hander Chris Young, set to start Sunday's game, is also part of the bullpen mix.
Holland did all he could to stay in the action.
"It came down to a couple of factors," Holland said. "My ability to execute pitches was one. That's something I've been dealing with for a while and we've worked through it."
The other was the postseason. Holland wasn't sure how he would hold up pitching on successive days. Last year, he saved all four victories of the Royals' American League Championship Series sweep of the Orioles on his way to matching a major-league record with seven saves in the postseason.
"The coaching staff, they weren't comfortable, and I wasn't really either, potentially out there two or three days in a row," Holland said.
Holland's arm troubles started late last season.
During an examination last September, the Royals' training staff tested the functionality of Holland's right arm and noticed the changes in his range of motion and increased inflammation, trainer Nick Kenney said. The medical staff informed Holland that they suspected there was damage to his ligament. Holland asked about his options going forward.
Holland knew how much he meant to the team, as the final link in Yost's bullpen formula. He wanted to pitch in October. Holland sat out nine days in September. He posted an 0.82 ERA in 11 playoff games.
The team chose "an aggressive approach, so he could be part of something very special," Kenney said. "And he was a big part of it. I feel very good about that, obviously."
Both Holland and the team hoped the offseason would give Holland sufficient time to rest and perform effectively in 2015. Once a pitcher tears his ulnar collateral ligament, the prospect of Tommy John surgery becomes almost a certainty. But Kenney pointed to others around the league, including Yankees ace Masahiro Tanaka, who have continued to produce despite playing with damaged ligaments.
At several points during the season, as Holland's fastball velocity dropped and his command disappeared, the team asked Holland to have his elbow examined. He stressed with reporters that he always refused, because he did not want to create a burden on himself or his teammates. And the Royals felt Holland, despite his declining peripheral statistics, was still effective enough to stay on the field.
"It's hard to justify ending that," Kenney said. "It has to be a combination of issue and production. And toward the end, it got to the point where his production was failing the test."
Through the pain, Holland logged 32 saves, which ranked sixth in the American League entering Thursday's game. His 145 saves ranks fourth on the Royals' career list. He's a two-time All-Star and won the Mariano Rivera Award as the AL's top reliever last season.
"He's an unbelievable competitor," Royals general manager Dayton Moore said. "He's a guy that you trust to pitch through those types of situations. And he's done an incredible job for us. He's done an incredible job for us this year.
"We knew this day would come, at some point in time. Because of who he is and what he's meant to our baseball team, we felt that we were going to continue to give him the ball until he couldn't do it."
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