Cardiff Rugby will declare their intention to go into administration with the Welsh Rugby Union (WRU) in line for a takeover of the regional side.
The Welsh professional rugby team has served a notice of intent (NOI) to appoint an administrator.
That is a formal document filed in court by a company or its directors to inform parties the company intends to enter administration, a process aimed at rescuing a struggling business from liquidation.
Cardiff staff, including players and coaches, held an emergency meeting on Tuesday afternoon with chief executive Richard Holland.
A statement read: "Cardiff Rugby can confirm notice of intention to appoint administrators has been filed.
"Please rest assured everything possible is being done to protect our employees and the future of the club.
"We have a plan in place and we will update you as soon as possible."
The WRU cannot officially step in straight away but is set to support Cardiff by initially taking on the day-to-day running of the organisation.
A WRU statement said: "We are aware Cardiff Rugby have confirmed notice of intention to appoint administrators, and we are working closely with the Cardiff Board and the administrators to safeguard the future of professional rugby in Cardiff."
Investment group Helford Capital Limited completed a Cardiff takeover in January 2024 after it acquired an 84.55% shareholding in the regional team.
The news of Cardiff's administration comes with the WRU due to announce a new deal with all four Welsh professional sides - called the Professional Rugby Agreement (PRA) - as part of the "One Wales" strategy through until 2029.
The premise is based on the four regions - Cardiff, Dragons, Ospreys and Scarlets - being functioning independent businesses with private investment.
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