Injured Reserve are extra slots on your roster that can be used for players that are unable to play for your team due to injury.
You can set the number of injured reserve slots in League Settings:
A player is eligible for IR if they are considered OUT or if they are placed on the actual Injured Reserved list by their team.
If you have a player on IR who is no longer IR eligible, you must create room by dropping someone from your bench before you can make further Free Agent or Waiver moves.
Your other option is to make a trade if your roster is locked due to this scenario
Note: Sleeper preserves a player's IR designation if they get a season ending injury until May 1st of the following year.