The 47-year-old former flanker who also captained England said the news had "been incredibly hard to process" and a "huge shock to me and my family."
Moody, capped 71 times and who won the European Cup twice with Leicester Tigers, said he would focus on remaining positive.
"I'm writing to share some tough news," he said in a statement.
"I have recently been diagnosed with ALS, also known as Motor Neurone Disease (MND).
"This has been incredibly hard to process and a huge shock to me and my family.
"I feel fit and well in myself and I'm focused on staying positive, living life and dealing with the changes I will experience as they come."
Moody, who is married with two teenage sons, told the BBC he and his family understood the consequences of the diagnosis.
Moody, speaking alongside his wife Annie, added the diagnosis was "strange because I feel like nothing's wrong".
"I don't feel ill. I don't feel unwell," he said.
"My symptoms are very minor. I have a bit of muscle wasting in the hand and the shoulder.
"I'm still capable of doing anything and everything. And hopefully that will continue for as long as is possible."
MND causes muscle weakness that worsens over a few months or years. There is currently no cure.
Moody's revelation sparked a swathe of sympathy across the sport.
"We are all deeply saddened and distressed to learn that Lewis Moody has been diagnosed with Motor Neurone Disease," Rugby Football Union CEO Bill Sweeney said in a statement.
"Lewis represented England, the British and Irish Lions and his clubs Leicester Tigers and Bath Rugby with both brilliance and distinction - one of the toughest and most fearless players ever to don a backrow shirt in the game, earning the respect and admiration of teammates, opponents, and supporters alike all over the world.
"His contribution to rugby, both on and off the field, reflects the very best of our sport’s values.
"We are ready to offer practical and emotional support to the Moody family in whatever way is needed and appropriate."
Leicester said Moody, who captained England 12 times and won three Test caps for the British and Irish Lions, was an "instrumental part of a golden era for Tigers."
"The figures, trophies and awards tell you what an incredible player Lewis was, but that is only half the story," said Tigers Chief Executive Andrea Pinchen in a club statement.
"As an individual, his commitment to his club along with his warmth and passion shone through, which endeared him to teammates, staff and supporters alike.
"Always looking to help others, Lewis together with Annie have worked tirelessly through the Lewis Moody Foundation, supporting research into brain tumours and helping affected families."
Fellow rugby union player Doddie Weir of Scotland and rugby league's Rob Burrow have died from MND in recent years.