The 44-year-old German suffered serious brain trauma, was in a coma on arrival and underwent a brain operation.
He was skiing off-piste with his son in the French Alps on Sunday when the accident occurred. Schumacher was wearing a helmet when he fell and hit his head against a rock, his manager Sabine Kehm said.
Early reports had said his condition was not life-threatening and he reportedly walked away from the accident complaining only of feeling a bit shaken.
The accident took place in the French ski resort of Meribel on Sunday morning.
The German, who is due to turn 45 on 3 January, retired from F1 for a second time in 2012. Schumacher won seven world championships and secured 91 race victories during his 19-year career.
He won two titles with Benetton, in 1994 and 1995, before switching to Ferrari in 1996 and going on to win five straight titles from 2000.
After the German retired in 2006, he was seriously hurt in a motorcycling accident in Spain three years later, during which he suffered neck and spine injuries.
But Schumacher managed to recover and made a comeback in F1 with Mercedes in 2010.
After three seasons which yielded just one podium finish, he quit the sport at the end of last year.
F1 drivers from around the globe have expressed their shock at the news of the accident.