Kimlin signed for the European new-boys on a short term deal to work his way back to full fitness following a shoulder injury but has now returned to Super 15 side the Brumbies to undergo his rehabilitation ahead of their 2011 campaign which begins in February.
"It's a frustrating time for Peter, he came over and we anticipated him being involved in a bit more rugby," said Baxter.
"He arrived too late for us to get him involved in the early European games, that held him back from the next round of Premiership games and once he got his feet under the table.
"This week in training he's picked up a knee injury that will keep him out for the rest of the time he's here with us. It's very unfortunate for Peter as he was looking to have a big pre-season running into the Super 15s for the Brumbies, but these things do happen in rugby."
Kimlin himself was understandably "gutted" when told that he would be out of action for up to three months.
"I'm pretty disappointed about what's happened, but it's one of those things," said a philosophical Kimlin. "When I came here the anticipation about playing was quite exciting and being able to come to a new environment was really challenging.
"The month I've been here I saw little steps coming back; I was getting fitter and obviously getting a bit more rugby. It was something different and after being out for 12 months it was what I needed."
Exeter will be looking to build on an excellent 34-19 away victory over Bourgoin in Round 2 of the Amlin Challenge Cup when they face compatriots Newcastle Falcons in back to back games in December.