The administration will affect only Harland & Wolff Holdings Plc, the group holding company, with its four yards, Belfast, Appledore, Arnish and Methil, continuing to trade.
Harland & Wolff said: “The board has concluded that the company is insolvent on a balance sheet basis per its last audited accounts and most recent management accounts.
“Accordingly, contingency planning for the making of an administration order and appointment of administrators from Teneo is underway for the company. This process will likely commence this week.
“Should administrators be formally appointed then the company’s shares would not resume trading on the (Alternative Investment Market).
“In these circumstances, the board expects there will be no return likely for shareholders.
“Appropriate plans are in place for a number of the group’s employees … with the unfortunate but inevitable consequence of redundancies.”
In the announcement, bosses blamed the crisis on the UK Government’s refusal to underwrite a £200m refinancing of the group, which is groaning under massive debts.
This was originally promised by Conservative ministers, but Jonathan Reynolds, the new Business Secretary, vetoed the deal in July amid concerns it would lose taxpayers’ money.
The decision prompted the ousting of former chief executive John Wood and the appointment of caretaker bosses including restructuring expert Russell Downs, who is currently executive chairman.
Separately on Monday, Harland insisted it was still trying to salvage its role in the Royal Navy’s £1.6bn fleet solid support (FSS) programme to build three supply ships.
Bosses are in “regular discussion” with Navantia and the Ministry of Defence, Monday’s statement said, with talks between Harland and Navantia focused on “the terms of a plan to enable work to resume on the preparatory stages”.
Over the weekend, Mr Downs also said Navantia was weighing up a possible takeover offer for the company’s Belfast operations.
In a statement, Harland added: “The group has undertaken significant planning over the last eight weeks to review and revise its plans for building the three FSS vessels.
“When the announcement of new directors was made in July, preparatory work at Belfast was almost at a standstill and production slots on key equipment were suspended due to certain delayed payments.
“The board is in regular discussion with Navantia and [the] MoD on its plans to ensure that key milestones of cutting steel, production readiness and delivery of the vessels remain on track.
“The plan for delivery of the FSS contract has been tested and been subject to significant review.”
The company also confirmed it had begun an investigation into “the alleged misapplication of remittances in excess of £25m and certain other lower value matters” under former boss Mr Wood.
He has dismissed the allegations as “ridiculous”.
Matt Roberts, national officer for the GMB union, which represents workers at Harland’s sites, said: “Workers, their families and whole communities now face their lives being thrown into chaos due to chronic failures in industrial strategy and corporate mismanagement.
“All the four Harland & Wolff yards are needed for our future sovereign capabilities in sectors like renewables and shipbuilding.
“The Government must now act to ensure no private company is allowed to cherry pick what parts are retained, in terms of which yards or contracts they wish to save.
“Leaving these vital yards – and the crucial FSS contract with all its promises for UK shipbuilding – to the mercy of the market is not good enough. The Government must provide support and oversight to get the market to the solution we need.”