Often no specific treatment is necessary - in time the cyst may resolve and symptoms improve of their own accord.
However, it's important to treat the underlying cause of the problem, such as arthritis, to prevent further development of the cyst. Doing this often helps to relieve any swelling and discomfort caused by the cyst.
If the cyst is large or causing pain, drawing off the fluid with a needle can help, but the cyst will often recur following this procedure.
A cortisone injection can help by reducing the amount of fluid produced and relieving painful inflammation.
Surgery to remove the cyst and to repair any causative damage, for example a torn cartilage, can be performed if other measures have not solved the problem.
This info is from a medical site. I had this many years ago and really sympathise with your wife. It can be very painful. At the time I was put on Codein adn Paracetamol and it did go away by itself. If I remember correctly it took about two + weeks. I do have osteoarthritis and now have two knee replacements. I hope your wife's heals quickly!