The England international picked up the problem against Manchester City, although the initial diagnosis claimed he would only face two weeks on the sidelines.
But Ferguson has now revealed Young will play no further part this season, as United look to wrap up the Premier League title.
Speaking to MUTV as reported by Sky Sports, Ferguson said: "We have bad news on Ashley, he is out for the season unfortunately.
"It is a bad blow. We thought two or three weeks but we took him down to a specialist in London on Wednesday and the prognosis is not very good at all.
"We are going to lose him for the season."
Young has spent a significant portion of the season on the treatment table, and faces a race against time to be fit for England's two summer friendlies against the Republic of Ireland on 29 May and Brazil on June 2.
United face Aston Villa at Old Trafford on Monday, and Ferguson is just happy to have a strong squad heading into the match after a bruising mid-week encounter against West Ham at Upton Park.
"There are a few bumps and bruises from West Ham on Wednesday," Ferguson continued. "Nemanja Vidic has a beautiful bruise on his cheek bone. I am quite happy to get out of that war zone without a serious injury."