Festival Republic announced its new State Fayre festival in November, naming Kings of Leon and The Lumineers as its other headliners.
The bill spans rock, country and folk music across three stages.
Young has won a string of accolades across his six-decade career, including two Grammys and nine Juno Awards.
He was booked to perform with his backing band, The Chrome Hearts, who he started playing with in 2024.
His tour was due to begin at the Eden Project in Cornwall in June, before finishing in Lucca, Italy, in July.
A spokeswoman for Festival Republic said: “The State Fayre team are working hard to confirm a replacement headliner which we expect to announce this week.”
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