Helm's wife Sandy and daughter Amy released a short statement on Tuesday (April 17) thanking fans for their support and encouraging them to send "prayers and love".
The family wrote: "Dear friends, Levon is in the final stages of his battle with cancer. Please send your prayers and love to him as he makes his way through this part of his journey.
"Thank you fans and music lovers who have made his life so filled with joy and celebration... he has loved nothing more than to play, to fill the room up with music, lay down the back beat, and make the people dance! He did it every time he took the stage.
"We appreciate all the love and support and concern."
Helm was born Mark Lavon Helm on May 26, 1940 and rose to fame as the drummer and vocalist in influential roots rock group The Band.
The Grammy Award-winning musician has also achieved success as a solo artist, winning the first Grammy for 'Best Americana Album' in 2010 with Electric Dirt.
Helm also appeared in a number of movies, notably playing Loretta Lynn's father Ted Webb in biopic Coal Miner's Daughter.
He was diagnosed with throat cancer in the late 1990s and underwent a course of radiation treatment to remove a tumour.
Watch Levon Helm in a clip from The Band's 1976 'Last Waltz' concert below: