Saunders, 33, has been battling a knee injury suffered during pre-season, but recent tests revealed a cartilage tear that will now sideline her for the remainder of the ANZ Premiership.
It's a huge blow for the Steel, who are already without shooter George Fisher this season due to a knee injury.
“It certainly took a while for the news to sink in,” Saunders said today.
''Mainly because it was quite a strange injury in terms of presentation, and I didn't expect my latest scan results to yield the diagnosis that it has.
“On the other hand, it is nice to now have some answers and more direction in terms of rehabilitation and steps forward.”
Saunders, the most capped player in the ANZ Premiership, returned to the field this season after welcoming her first child last year.
“I am extremely upset. “I was so excited to be back on the field,” she said.
“It's been great to see the team's improvement every week and I'm devastated that I can't contribute to that on the pitch now.
“I absolutely enjoyed my time at Steel. Even just being in the team environment was great.
''I love the pressure and competitiveness that comes with playing and the challenge of improving, learning and adapting every week.
“The team has gotten better every week and I'm excited to see how they continue to grow and how all the different combinations develop.”
Saunders backed young Ivari Christie, who she backed in wing attacks, to step up.
And she planned to continue guiding the Steel.
“I will stay connected to the team as much as possible and hopefully I can make it to a few more home games.
“That's the tricky part about being outside the team – not being there every day – but we have so many different ways to participate in meetings or training online and that way I can stay connected.”
Steel chief executive Sonya Fleming said Saunders had the team's unwavering support.
“Shannon's vast experience is not something that can be easily replaced and from a leadership perspective she represents a tremendous loss for us.
“Our priority remains supporting Shannon in her rehabilitation.”
The Steel are now looking for a replacement player ahead of their match against Mainland Tactix in Rangiora on Sunday.