Rangers Football Club has confirmed it has filed legal papers at the Court of Session to appoint administrators.
The club said it would continue with "business as usual" until it decided whether to take that step.
Rangers now has 10 days to make a decision. In the meantime, it said there would be "no impact on season ticket holders and shareholders".
The move comes while Rangers awaits a tax tribunal decision over a disputed bill, plus penalties, totalling £49m.
The club said in a statement, however, that if the tribunal decided in favour of HM Revenue and Customs (HMRC), it "could result in liabilities and penalties substantially more than the £50m reported which the club would be unable to pay".
He was later reported as saying this could reach up to £75m.
Craig Whyte, who bought the club from former owner Sir David Murray last year, said recently that administration was an option if the club lost the tax case.
'Protect the club'
The case relates to the use of employment benefit trusts (EBTs) to pay players and other staff.
It is thought that HMRC believe the club misused the scheme and avoided paying significant sums in tax.
In a statement released on Monday, Mr Whyte said the moves towards administration had been made to protect the club, which has taken the Scottish League Championship 54 times.
It now also faces a 10-point penalty if it formally enters administration.
Mr Whyte said: "Since I took over the majority shareholding of the club in May last year, it was clear to me the club was facing massive financial challenges both in terms of its ongoing financial structure and performance and the potential consequences of the HMRC first tier tax tribunal.
"I have taken the decision that the most practical way to safeguard the long-term future of the club is to go through a formal restructuring process. It may still be possible to avert this but that is not the most likely way forward.
"What is of paramount importance is the long-term security, survival and prosperity of this great football club."
Mr Whyte said it was "in the best interests of Rangers" that his ongoing restructuring of the club was "completed before the end of this season".
He said this had "meant turbulent times" as the club sought to "stand on its own feet, earning more than it spends".
"From my early days as chairman I saw that administration was a very real option to enable the club to address these challenges and make a fresh start," he said.
"Frankly, the case for administration in pure financial terms was compelling but I was acutely aware that such a great institution as Rangers could not be viewed exclusively in financial and business terms.
"The fact is that Rangers' ongoing financial position and the HMRC first tier tribunal are inextricably linked."
The Rangers chairman stated again that the club was running a £10m annual deficit and it was in the best interests of the club to cut costs significantly.
He continued: "There is no realistic or practical alternative to our approach because HMRC has made it plain to the club that should we be successful in the forthcoming tax tribunal decision they will appeal the decision.
"This would leave the club facing years of uncertainty and also having to pay immediately a range of liabilities to HMRC which will be due whatever the overall result of the tax tribunal.
"In blunt terms, if we waited until the outcome of the tax tribunal, the risk of Rangers being faced with an unacceptable financial burden and years of uncertainty is too great."
Mr Whyte said the tax case related to "a claim by HMRC for unpaid taxes over a period of several years dating back to 2001" which Rangers would be unable to pay if the tribunal went against the club.
He said Rangers' immediate future now lay in the hands of HMRC.
The chairman said: "If HMRC were to agree, even at this late stage, a manageable agreement with the club, then a formal insolvency procedure could yet be averted. It goes without saying that would be our preferred outcome.
"If not, further investment in the club would be impossible as the threat of winding up by HMRC cannot be removed.
"The Rangers FC Group, the majority shareholder in the club, is prepared to provide further funding for the club on the basis the funding is ring-fenced from the legacy HMRC issue."
Mr Whyte said Rangers had engaged a specialist restructuring practice, Duff and Phelps, to assist in finding a solution to the present position.
He added: "As a result of that advice, it has been decided to seek the protection of a moratorium from HMRC action whilst a Company Voluntary Arrangement (CVA) proposal is made to creditors.
"This, if approved by creditors within a month, would minimise any points deduction and allow the club to participate in European football.
"In short, if the club proceeds into administration then it will have to emerge from that process, with the agreement of creditors, within a month or so in order to be able to play in Europe next season."
Mr Whyte said administration would "regrettably lead to a cost-cutting programme and the potential loss of jobs across the business".
He said former directors may "contend that the steps we are announcing today are unnecessary".
"All I would say to these people is that if they want to step up to the plate and invest money in Rangers to avoid a restructuring of the business, then I would be most willing to talk to them," he said.
"In the past unfortunately, there were people who not only failed to prevent Rangers being engulfed by our current problems but chose not to invest their money to help put it right."
Mr Whyte said Rangers could "emerge as a stronger and financially fitter organisation" from this process.
He statement concluded: "As chairman of the club, every action I take will be in the interests of Rangers and there are many people working at the club who are dedicated to making Rangers a success.
"I would like to thank supporters for their great commitment to Rangers. This great football club can recover from the situation in which it now finds itself and be the force in football that the fans deserve."
Mr Whyte is understood to be the club's main secured creditor via a floating charge over its assets.
This would allow him to pursue other avenues such as receivership or pre-pack administration to satisfy the debts which the club owes him if a CVA cannot be secured.
These would involve transferring Rangers assets out to another company or companies to satisfy outstanding debts to the floating charge holder and leaving the club behind with the debt.
In such scenarios, it would be likely that Rangers FC - formed in 1873 - would be formally wound up.