Butler has been bowling with pain over the last year due to a bulging disc in his spine, Northern Districts coach Bruce Blair told the New Zealand Press Association.
Butler was dropped in June from the list of New Zealand Cricket's list of 20 top contracted players, from which the national team is usually drawn.
"He's been bowling with pain for over a year, so we've decided it's time we made some decisions about Ian which would give him his best chance of making a full recovery," Blair said.
"He'll enter into a rehab programme... looking to make a few changes to his bowling action."
Butler last played a test in October and has taken 24 wickets in eight tests at an average of 36.83. His last one day international was in December.