The former Melbourne coach has taken time off from the Crows for an indefinite period as he fights a form of chest cancer.
“Following a recent acute illness, Dean was admitted to hospital where he was found to have fluid in his left lung,” the Crows said in a statement on Wednesday.
“This has been treated but the underlying cause is unfortunately cancer within the chest.
“Dean is undergoing extensive tests to determine the exact type of cancer but this has yet to be determined.
“He will shortly start appropriate therapy to treat the cancer and is expected to require some time away from work.
“Dean has a typically positive outlook and hopes to be returning to work as soon as possible.”
Bailey joined Adelaide for the 2012 season as the club’s strategy and innovation coach and a mentor to senior coach Brenton Sanderson.
The 46-year-old was Melbourne’s head coach from 2008 until he was sacked during the 2011 season.
Bailey was suspended by the AFL last season for six months for bringing the game into disrepute, after a league investigation into alleged tanking while he was Melbourne coach.
The Crows said they were uncertain how long Bailey would be on leave.
“The club will cover his absence internally until we get a clearer picture about the length of his absence and treatment,” the club statement said.