Former shadow business secretary Angela Eagle - born in Bridlington - will launch a bid to oust Mr Corbyn on Monday after talks involving the trade unions failed to break the deadlock over his leadership.
Ms Eagle said Mr Corbyn had failed “to lead an organised and effective” Parliamentary Labour Party and she would set out her “vision for the country” on Monday.
It followed a call by Mr Corbyn for the party to “come together” as the crisis around his leadership deepened.
Deputy Labour leader Tom Watson pulled out of peace talks with the trade unions aimed at breaking the deadlock between Mr Corbyn and his MPs because “there is no realistic prospect of reaching a compromise” while the leader remained determined to stay in place.
Mr Watson’s decision to pull the plug on the talks makes the prospect of a leadership challenge more likely.
Mr Corbyn, who was attending the Durham Miners’ Gala, urged colleagues to unite in opposition to the Government.
He said: “Our union colleagues, who do a great deal to support the party and whose members do a great deal to support the party at ground level, want our party to come together, want our party to come together to oppose what the Tories are doing.
“I urge all my colleagues to listen very carefully to them and indeed come together to oppose what this Government is doing to the most vulnerable within our society.”
Ms Eagle thanked Mr Watson, Parliamentary Labour Party chairman John Cryer, chief whip Rosie Winterton and the union movement for trying “to find a solution to the impasse Labour faces with a leader who has failed to fulfil his first and foremost duty, that is to lead an organised and effective Parliamentary Labour Party that can both hold the Government to account and demonstrate we are ready to form a government in the event of a general election”.
She added: “On Monday morning I will announce my candidature for leader of the Labour Party. I will explain my vision for the country and the difference a strong Labour Party can make.”
A crisis meeting had been expected to take place in Brighton on Sunday before the giant Unite union’s conference in a final effort to break the deadlock over Mr Corbyn’s future.
The deputy leader said there had been “significant progress” during the discussions with the unions but “since the talks began Jeremy has publicly declared his intention to continue as leader come what may”.
“This means there is no realistic prospect of reaching a compromise that satisfies the majority of colleagues in the PLP.”
A spokesman for the Mr Corbym said: “Jeremy Corbyn has reached out to Labour MPs and made clear he wants to work with them to carry out his role as elected leader of the party. Jeremy regards the talks with trade union leaders as a vehicle to bring people together, and it is disappointing that some have walked away from them.
“Jeremy is committed to fulfilling all his responsibilities as democratically elected leader and will not betray the hundreds of thousands of people who elected him for a different direction for the Labour Party and a different kind of politics.
“He continues to be fully committed to working with the Parliamentary Labour Party and is ready to talk with as many people as necessary to assist that process, discussing policy initiatives and listening to ideas.
“He will remain leader of the Labour Party and will contest any leadership challenge if one is mounted.”