In a release from the school Monday, Hatchell said she would temporarily step away from her coaching duties to focus on treatment.
"I will remain very much involved with my team and day-to-day operations here at UNC and expect to return to my sideline responsibilities as soon as possible," Hatchell said in a statement. "My veteran staff and team will be well prepared and meet any challenges until my return. Don't forget I am a Tar Heel woman!"
Hatchell, 61, was inducted into the Naismith Memorial Basketball Hall of Fame last month. She's preparing for her 28th season with the Tar Heels and has 908 career victories, making her one of only three head coaches in the sport to win 900 games.
Hatchell has led UNC to the 1994 NCAA championship, three Final Fours and eight Atlantic Coast Conference tournament championships.
"Sylvia has our complete support and is in our thoughts and prayers for a full recovery," athletic director Bubba Cunningham said in a statement. "Sylvia is a fighter and her enduring spirit will aid her greatly."
Longtime assistant Andrew Calder will lead the program while Hatchell is away. He has been on Hatchell's staff throughout her tenure, which includes six 30-win seasons.
In addition, former Campbell men's head coach Billy Lee will be added as an assistant coach on a temporary basis during Hatchell's absence. Lee has been the team's director of video and scouting, and special assistant to the head coach.
Hatchell said she will be treated at the UNC Lineberger Comprehensive Care Center on the Chapel Hill campus. Dr. Pete Voorhees, an oncologist and associate professor in UNC's School of Medicine, will oversee her treatment.
"Sylvia remains strong and in good spirits," Voorhees said in a statement. "She is physically and mentally tough, and this will serve her well on her journey. We are optimistic that she will do well."
A tweet from The V Foundation Monday read: "Our thoughts are with Coach Hatchell and her family. We wish you a quick recovery."
UNC Basketball Coach Roy Williams, who had his own cancer scare last year, weighed in with his support saying, "I'm heartbroken for Sylvia, Sammy and Van. I know how much Sylvia loves to coach and compete with her team so any time that she misses will be difficult, but she's tough and she will fight this with everything she has. All of us at Carolina and all of her friends in the coaching community will support her 100 percent in this fight."