The UK based retailer will soon announce, on Monday, its plans for the closure of about a quarter of its stores.
The private equity-owned company has suffered falling like-for-like sales, with analysts saying it has failed to aggressively build up its online business and lost sales to competitors like Amazon.
Toys R US UK said the plans would see it close 26 stores out of its 105-strong UK chain with hundreds of job losses.
Steve Knights, managing director of Toys R Us UK, said the closures affected warehouse-style stores it opened in the 1980s and 1990s which "are too big and expensive to run in the current retail environment".
Toys R Us became...
The toy retailer, which has been a favourite among British families since the 1980s, is looking to move away from its "big box" out-of-town store model in favour of smaller "more interactive" shops "in the right locations".
"The decision to propose this CVA was a hard on, but we determined it is the best path forward to make essential changes to the business".
"The business has been lossmaking in recent years and so we need to take strong and decisive action to accelerate the transformation".
Over the coming days, the company will hold talks with creditors to ensure they understand the full detail of the proposal.
The UK arm of Toys R Us is owned by the USA company, but run as a separate business.