The International Olympic Committee is considering a postponement of Tokyo 2020, and has given itself a deadline of four weeks to make a decision.
The IOC's executive board met on Sunday amid mounting pressure from athletes and national Olympic committees for the Games to be delayed because of the coronavirus crisis.
"In light of the worldwide deteriorating situation... the executive board has today initiated the next step in the IOC's scenario-planning," it said in a statement.
"These scenarios relate to modifying existing operational plans for the Games to go ahead on 24 July 2020, and also for changes to the start date of the Games."
Cancellation is "not on the agenda", said the IOC, but a "scaled-down" Games will also be considered.
However, postponement - by either several months or probably a whole year - is thought to be the most likely outcome.
The development marks a significant shift by the IOC, which as recently as five days ago said it was "fully committed" to the Tokyo 2020 Games.
British Olympic Association (BOA) chairman Sir Hugh Robertson said: "We welcome the IOC executive board decision to review the options in respect of a postponement of the Tokyo 2020 Olympic Games.
"However, we urge rapid decision-making for the sake of athletes who still face significant uncertainty.
"Restrictions now in place have removed the ability of athletes to compete on a level playing field and it simply does not seem appropriate to continue on the present course towards the Olympic Games in the current environment."
The International Paralympic Committee said it "fully supports" the decision to "investigate potential scenarios".
Dame Katherine Grainger, chair of UK Sport, said the news was "inevitable" and it was "the correct decision for the safety of athletes, staff and fans".
Sports Minister Nigel Huddleston said: "It is right that the IOC seriously considers postponing the Tokyo 2020 Olympic Games.
"The health and safety of athletes, sports fans and officials due to work at the Games is absolutely paramount. We would welcome the IOC making a definitive decision soon, to bring clarity to all those involved."
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On Tuesday the BOA, the British Paralympic Association and UK Sport will host a conference call with the chief executives and performance directors of summer Olympic and Paralympic sports.
Athlete representative bodies will also be invited to join the call, which will primarily be used to discuss the impact of the coronavirus pandemic in the UK, such as the closure of elite training facilities.
The IOC added: "There is a dramatic increase in cases and new outbreaks of Covid-19 in different countries on different continents. This led the executive board to the conclusion that the IOC needs to take the next step in its scenario-planning.
"The IOC will, in full coordination and partnership with the Tokyo 2020 Organising Committee, the Japanese authorities and the Tokyo Metropolitan Government, start detailed discussions to complete its assessment of the rapid development of the worldwide health situation and its impact on the Olympic Games, including the scenario of postponement.
"The IOC executive board emphasised that a cancellation of the Olympic Games Tokyo 2020 would not solve any of the problems or help anybody."
In a letter to athletes published on Sunday, IOC president Thomas Bach said that "we are in a dilemma" and "a final decision about the date of the Olympic Games Tokyo 2020 now would still be premature".
He added that to postpone the Games "is an extremely complex challenge" and a cancellation would "destroy the Olympic dream of 11,000 athletes".
In terms of a postponement, Bach warned: "A number of critical venues needed for the Games could potentially not be available anymore.
"The situations with millions of nights already booked in hotels is extremely difficult to handle, and the international sports calendar for at least 33 Olympic sports would have to be adapted. These are just a few of many, many more challenges."
UK Athletics, its US counterpart, and several national Olympic governing bodies have urged the IOC in recent days to delay the Games.