The sag sign indicates a possible incompetency of the posterior cruciate ligament.
Observing the sag sign
The patient lies on their back with the feet on the examination couch, and the knees bent to 90 degrees. The observer looks at the profile of the knees from the side. If the posterior cruciate ligament is torn, the one tibia may 'sag' to have a different profile at the knee from the other side.
Injuries to the posterior cruciate ligament of the knee. Kannus P, Bergfeld J, Järvinen M, Johnson RJ, Pope M, Renström P and Yasuda K. Arch Bone Jt Surg. 2018 Jan; 6(1): 8–18.
Posterior Cruciate Ligament: Current Concepts Review. Pache S, Aman ZS, BS, Kennedy M, Nakama GY, Moatshe G, Ziegler C and LaPrade RF. Arch Bone Jt Surg. 2018 Jan; 6(1): 8–18.