The England international picked up the problem in this month's 2-1 defeat by Manchester City and attended Wednesday's 2-2 draw at West Ham United on crutches.
"Ashley is out for the season," Ferguson, whose side can secure the Premier League title on Monday if they beat Aston Villa and second-placed Manchester City lose at Tottenham Hotspur on Sunday, told MUTV.
"It's unfortunate and it's a bad blow. We thought it'd be maybe two or three weeks but now he's been down to the specialist and that's why you saw him at the game on Wednesday.
"We took him down to a specialist in London and the prognosis was not very good at all. We're going to lose him for the rest of the season."
Young will just have to be a spectator when United take on his former club Villa at Old Trafford, where they would like nothing better than to wrap up the title with games to spare after last year's drama of losing out on goal difference.
After a physical encounter with West Ham United in a 2-2 draw on Wednesday, Ferguson was relieved not to have anyone joining Young on the sidelines.
"We've got a few bumps and bruises from Wednesday," Ferguson, whose side have 81 points from 33 games with City on 68 from 32, told a news conference.
"[Nemanja] Vidic has got a beautiful bruise on his cheekbone and after coming out of that war zone, we're quite happy no one was seriously injured."
Ferguson is expecting another battle against Villa, who are hovering one place and three points above the relegation zone.
"You expect a scrap," he said. "Villa, as they showed against Stoke City [in a 3-1 win this month], have got a bit of life about them at the moment. I expect they will have a real go at it."
A manager who has so often given young players a chance to make it in the first team, Ferguson spoke of his admiration for the way Villa manager Paul Lambert has built his youthful side.
"Young people give you a future, by creating that strong blend of youth they can last for a few years. It will get better," the Scot said.
"It creates a good loyalty base, young players always remember the manager who gave them their first start. He's done very well, he's had courage to do it.
"If they were to go down then they have a structure that should bring them back up. But on the evidence of what we've seen recently they've got every chance of staying up."
