The American, who has been racing for Red Bull Honda's World Superbike team, collided with a car near Rimini Wednesday.
The 35-year-old has sustained multiple injuries including "serious cerebral damage."
"The young man, who is still in the intensive care unit of Cesana's Bufalini hospital, has suffered a serious polytrauma with subsequent serious cerebral damage," read a statement from the hospital.
"The prognosis remains reserved."
Hayden, from Owensboro, Kentucky, was treated at the scene and taken to a hospital near Rimini before being transfered to the facility in Cesana.
He has been joined by his fiancée Jackie as well as his brother Tommy and mother Rose who arrived from the US Thursday.
Hayden, who had raced in the World Superbike Championship at Imola in Italy last Sunday, won the MotoGP championship in 2006.
Italy's Valentino Rossi, the man Hayden edged to win his world title, led the tributes to him on social media.
"Nicky is one of the best friends I've ever had in the paddock," wrote the seven-time MotoGP champion on Instagram.
Three-time MotoGP champion Marc Marquez wrote on Titter: "My thoughts are with you."
American multiple world champion Wayne Rainey also said he was praying for Hayden.