Wife Sharon Osbourne and son Jack Osbourne announced the venture at a brand licensing trade show in Las Vegas earlier this week, Rolling Stone writes.
The family has collaborated with tech company Hyperreal, which has previously created avatars of rapper The Notorious BIG and Lionel Messi, to create the Ozzy avatar.
"The creation carries Ozzy Osbourne's digital DNA, voice, image and movements," Jack Osbourne said at the event.
"You can ask Ozzy anything, and he will answer you in his own voice - and the answers will be what Ozzy would have said," Sharon Osbourne continued.
The new Ozzy will be presented to fans in the UK and the US this summer.
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