Rangers have lodged papers at Edinburgh's Court of Session stating their intention to enter administration.
The Ibrox club have been awaiting the result of a tribunal with Her Majesty's Revenue and Customs, relating to employee benefit trust payments to staff and which could cost Rangers up to £49m. It is as yet unknown whether Rangers are aware that case has gone against them, or the club has simply run out of funds to continue trading at their present level.
The papers represent the first step in the formal process of administration. Rangers now have 10 days to formally state that administrators have taken over the running of the business. During that period, the club can speak with creditors in a bid to reach agreement over liabilities.
Rangers can now expect an automatic 10-point penalty from the Scottish Premier League.
Craig Whyte, the club's owner, mortgaged £24m of future season ticket revenues around the time of his Rangers takeover last May. More recently, Whyte's running of the club has been subject to intense scrutiny and criticism from previous board members.
The firm prospect of administration, which would bring a 10-point penalty from the Scottish Premier League, will come as no surprise to Rangers fans or the rest of Scottish football.
The Ibrox club are awaiting the verdict of a tax tribunal which could cost club around £49m.
The HMRC case revolves around the use of employee benefits trusts (EBTs) which were in place before Whyte took over from Sir David Murray last May.
The tribunal verdict is imminent but it looks like the Ibrox club have pre-empted any decision.
Whyte, who bought Murray's shares for £1 and pledged to pay off £18m of debt to Lloyds Banking Group, has seen his short tenure shrouded in controversy.
Last week the former Rangers chairman Alastair Johnston revealed he had asked the Government's Insolvency Service to clarify "certain financial arrangements" relating to the takeover of the club.
Whyte had earlier admitted securing funds from loan company Ticketus in lieu of future season ticket sales.
Johnston told the BBC "Rangers' stakeholders are now demanding full transparency. I have had numerous approaches following the recent revelations in the press about the acquisition of Rangers Football Club and the use of future season ticket money.
"I am not in a position to answer all the questions put to me, but I do recognise the issue is causing much concern. I believe this is a prevalent view amongst Rangers' stakeholders who are now demanding full transparency about the funding of the acquisition of the club, its current financial status, and most importantly, the way forward."
A Scottish Premier League spokesman said that a 10-point deduction and a transfer Embargo would only be put in place when administration was confirmed.
The spokesman said "At this point in time Rangers are not in administration and we await developments. The instant that they are technically in administration there will be an automatic 10-point deduction and, perhaps of less relevance, an Embargo on player registrations.
"If administration is confirmed, as we have done previously, we would be looking to work with the administrators and would be looking for a very early meeting."
Rangers announced they had agreed a deal to sign Gabon striker Daniel Cousin just as news emerged from the court.
