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Theresa May is expected to announce the date of her departure from Downing Street on Friday morning, senior cabinet ministers have told the BBC.
Sources say they expect the PM to give a timetable for her successor to be chosen, with 10 June likely to be the start of the official leadership race.
She is expected to meet the chairman of Tory backbenchers imminently.
She has been under pressure to resign, after a backlash by her own MPs against her latest Brexit plan.
Since January, Parliament has rejected the withdrawal agreement Mrs May negotiated with the EU three times. Recent attempts to find a formal compromise with Labour also failed.
Mrs May had planned to publish the Withdrawal Agreement Bill on Friday – the legislation required to bring the agreement into UK law – describing it as “one last chance” to deliver Brexit.
However, her proposals – including a customs union arrangement and an offer to give MPs a vote on holding another referendum – angered many Tories.
Labour said it was a “rehash” and they would not support the plans.
Andrea Leadsom quit as Commons leader on Wednesday evening saying she no longer believed the government’s approach would “deliver on the referendum result”.
And on Thursday, Mrs May met Home Secretary Sajid Javid and Foreign Secretary Jeremy Hunt at Downing Street, where they are understood to have expressed their concerns about the bill.
BBC political editor Laura Kuenssberg says several cabinet ministers have said they expect Mrs May to announce her departure on Friday morning, although there has been no confirmation from Downing Street.
Ministers hope the campaign for the next Conservative Party leader can be finished by the end of July.
A leadership contest beginning on 10 June would come after the state visit from US President Donald Trump and the Peterborough by-election.
More than 12 Conservative MPs are seriously considering running, Laura Kuenssberg said, with former foreign secretary Boris Johnson currently seen as the front runner.
But former cabinet minister Ken Clarke told BBC Radio 4’s Today programme: “The idea that he’s a shoo-in is nonsense … the person expected to win hasn’t won one of these for a very long time as far as I can recall.”
He said he expected a “chaotic six weeks” to follow, “a possibly harmful diversion from the deadlock on the European Union”.
“We’ve got to make sure the whole thing is conducted in an atmosphere which doesn’t add to the air of tragic farce which has already been surrounding the party and European issue for the last 12 months.”
Sir Graham Brady, the chairman of the 1922 Committee of Conservative backbenchers, is meeting the prime minister on Friday morning.
He was thought to expect her to name a date for her departure – with the possibility of further moves by Conservative MPs to instigate a vote of no confidence in her, if she did not.
Source: BBC