The 50-year-old pop superstar - who has previously been photographed looking frail in a wheelchair - is said to be battling inherited condition A1AD (alpha-1 antitrypsin deficiency) which leaves sufferers without a protein needed to protect the lungs.
Ian Halperin, a respected writer, also claims father-of-three Michael is now nearly blind after keeping the deadly condition a secret "for years."
He said: "He needs a lung transplant, but may be too weak to go through with it."
"He also has emphysema and chronic gastrointestinal bleeding, which his doctors have had a lot of trouble stopping."
"It's the bleeding that's the most problematic part. It could kill him."
"He can barely speak. The vision in his left eye is 95 per cent gone."
"For years Michael has been working with his doctors to make sure it doesn't progress."
"He has been on many medications that have stabilized him."
Michael's brother Jermaine also revealed the "Thriller" singer - who is currently working on his comeback album with rappers including Ne-Yo - is "not doing so well right now," only saying: "This isn't a good time."
The news of Michael's illness comes just days after a woman called Billie Jean Jackson, who claims to be the singer's wife and the mother of his youngest son Prince Michael II, announced she is suing him for $1,033,000 and joint custody of the six-year-old child.
