Health Secretary Jeremy Hunt will be consulted on whether to put the Mid Staffordshire NHS Foundation Trust into administration.
Health regulator Monitor confirmed in a statement it will discuss the move with Mr Hunt and "key organisations", saying:
A decision in principle was taken by Monitor's Board yesterday following a recommendation from experts in the Contingency Planning Team that was sent into the Trust five months ago.
The team concluded earlier this year that the troubled trust was neither clinically nor financially sustainable in its current form in the long term.
However existing patient services have been given a clean bill of health by the Care Quality Commission.
David Bennett, Chief Executive of Monitor, added:
We are now consulting on whether to appoint Trust Special Administrators with the expertise to reorganise services in a way which is clinically robust and sustainable.
Their priority will be to make sure that patients can continue to access the services that they need and they will work with the local community to do this.
More top news
Ministry of Defence investigating allegations that members of the British Army shouted sexist abuse watching England Women football team.
The US space agency NASA's Dawn spacecraft has become the first mission to achieve orbit around a dwarf planet.
Comedian Peter Kay has said he is "thrilled" to star in a adaptation of broadcaster Danny Baker's autobiography.