Angela Eagle will challenge Jeremy Corbyn for the Labour leadership after union-backed peace talks aimed at resolving the crisis at the top of the party collapsed.
Eagle accused Corbyn of failing "to lead an organised and effective" opposition, promising to explain her vision on Monday.
Corbyn said that he will "contest any leadership challenge" in a fight where he believes he will be backed by members.
"The starting gun has been fired on a Labour leadership contest that is highly likely to culminate in the break-up of the party," ITV News' Robert Peston said.
Corbyn, who won a landslide victory last September, has faced intense pressure to resign.
Nearly his entire shadow cabinet resigned and a motion of no confidence in his leadership was passed following the EU referendum.
Mr Corbyn has responded saying that he is committed to fulfilling responsibilities and "will not betray" the people who elected him, and also committed to working with the Parliamentary Labour Party.
A spokesman for the party leader said: "Jeremy Corbyn has reached out to Labour MPs and made clear he wants to work with them to carry out his role as elected leader of the party.
"Jeremy regards the talks with trade union leaders as a vehicle to bring people together, and it is disappointing that some have walked away from them."
Tom Watson, the party's deputy leader, earlier announced "with regret and sadness" that there was little to be achieved in persisting with talks with the unions due to Corbyn's refusal to step down.
"This means there is no realistic prospect of reaching a compromise that satisfies the majority of colleagues in the PLP," he said.
Unite leader Len McCluskey has described Tom Watson's actions as an "act of sabotage fraught with peril for the future of the party".
Owen Smith MP has said he is "disappointed" that talks have broken down, but said that he is "committed to doing anything necessary to prevent a split, and unite the party".