Tim Bergling was the Swedish superstar's real name.
Avicii, 28, was found dead last year in Muscat, Oman. He was 28.
The Swedish star had been open about his matches and took a break from tour in 2016.
"Creating music is what makes me happy and i have got to know so many good people in my days of touring, seen so many great places and created endless memories, "he wrote on social media at that time.
"The decision I made may seem strange to some, but everyone is different, and to me it was right."
After his death, his family spoke of his difficulties.
"Our beloved Tim was a seeker, a fragile artistic soul seeking for answers to existential questions," the statement obtained by CNN is read. "An overcrowding perfectionist who traveled and worked hard at a pace leading to extreme stress. When he stopped touring, he wanted to find a balance in life to be happy and to do what he loved most ̵
The statement continued: "He really fought with thoughts of meaning, Life, Happiness. He couldn't go on. He wanted to find peace. Tim was not made for the business machine he was in, he was a sensitive guy who loved his fans, but the spotlight shamed. Tim, you are forever loved and sadly missed. The person you were and your music will keep your memory alive. "
The family said the new foundation will also focus on issues including climate and nature conservation .
"Tim would make a difference – starting a foundation in his name is our way of honoring memory and continuing to act in his spirit," the family said in a statement.
CNN's belief Karimi, Chloe Melas and Sandra Gonzalez contributed to this report.