The government has been issued with an urgent notification after serious failings were found at HMP Birmingham.
The Chief Inspector of Prisons, Peter Clarke, confirmed the move after the prison failed all the key tests in its latest inspection.
Justice Secretary David Gauke is being urged to address the issues at the prison, which is privately run by G4S.
The Ministry of Justice said it was waiting to hear the Inspectorate of Prisons findings. G4S did not comment.
The prison, in the Winson Green area of the city, was graded "poor" on all four categories: safety, respect, activity and resettlement.
Inspectors concluded their two-week unannounced scrutiny of the facility on Thursday.
The urgent notification notice is the first issued for a prison run by a private company and will require Mr Gauke to formulate an action plan within 28 days to improve HMP Birmingham.
A Prison Service spokesman said: "We await the inspectorate's findings and we will respond fully to their report and recommendations".
Only two other prisons - Nottingham and Exeter - have been issued with such notices since the system began last year.
Separately, the BBC has learned that inspectors' cars were among nine torched outside the prison on Tuesday by two men reportedly "armed with a firearm".
It is not thought the vehicles were deliberately targeted.
One police line of inquiry is that the arson attack was connected to a major drugs operation in the prison.
The Victorian jail was the scene of a riot in December 2016 which caused huge damage to four wings and resulted in 500 prisoners being moved out.
An inspection report last year found a "high volume of illicit drugs" and described education and training as a "major area of concern".