The winger damaged his ankle in the Manchester derby on 8 April and attended the draw at West Ham on crutches.
As well as missing the visit of his former club Aston Villa on Monday, the England international will play no further part in the campaign as the Reds strive to win a 20th title.
"Ashley is out for the season," the boss 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."
It is a blow to Young, who has made 17 starts and two further substitute appearances in the Barclays Premier League this term but has suffered a couple of injury lay-offs.