"Malcolm is suffering from dementia and the family thanks you for respecting their privacy," they said in a statement.
The Sydney Morning Herald is also reporting that Young is now living in a local care facility.
Born in Scotland, Young formed the band in 1973 with his younger brother Angus, the band's lead guitarist, after arriving in Sydney.
AC/DC had recently announced Young would not be returning to its line-up due to poor health.
His nephew Steve Young will feature on their upcoming album Rock or Bust in his place, and will also join AC/DC when they tour next year.
Other members of the band include drummer Phil Rudd, bassist Cliff Williams, and Brian Johnson, who took over as singer of the band in 1980 after the death of Bon Scott.
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