The retailer has announced it intends to appoint Deloitte as its administrator in a move that puts at risk the jobs of the group's 4,350 staff and the brand's 92-year presence on high streets.
HMV’s directors claimed in a statement that Deloitte intends the business "to continue to trade whilst they seek a purchaser for the business".
The administration comes after HMV attempted to raise funds by launching a "huge price promotion" on Saturday 12 January across all of its stores, offering 25% off thousands of CDs, DVDs, Blu-rays, games and technology products.
HMV made the decision to call administrators last night after an emergency board meeting, but has an issued a statement revealing the 12th hour meeting was to no avail.
HMV said in a statement: "The board regrets to announce that it has been unable to reach a position where it feels able to continue to trade outside of insolvency protection, and in the circumstances therefore intends to file notice to appoint administrators to the company and certain of its subsidiaries with immediate effect."
The administration could see the HMV brand and its large real estate portfolio, encompassing more than 230 stores, disappear if no buyer is found.
HMV opened up its first store in 1921 on Oxford Street and grew to dominate the UK music market, which led to it pursuing aggressive growth in the 90s by expanding up to 325 stores and acquiring book retailer Waterstones, which was sold in May 2011.
However, executives failed to effectively combat the digital music revolution led by Amazon and Apple, while supermarkets moving into the CD and DVD market have also damaged HMV’s sales.
HMV brought in former Jessops chief executive Trevor Moore in an attempt to save the business when Simon Fox quit his job as HMV chief executive on 3 September, after six years at the business.
Under Fox's tenure, HMV attempted to turn around the business by acquiring live music venues including the Hammersmith Apollo and even experimented with launching cinemas in stores.
Fox has since joined Trinity Mirror, the owner of the Daily Mirror and the Liverpool Echo, replacing Sly Bailey, the group's former chief executive.