The NSW arm of the construction union will be forced into administration after allegations of criminal and corrupt behaviour in the CFMEU.
A Federal Court application seeking orders to appoint an administrator will be filed by the NSW government on Monday, backing in a similar move on Friday by the federal Fair Work Commission.
The powerful union has been in a fight for survival since several officials were accused of taking kickbacks, being linked to organised crime and employing standover tactics on worksites, in a series of Nine newspaper reports.
The union has already sought legal advice over the Fair Work Commission's court proceedings launched on Friday, insisting it has done "everything possible" to co-operate with authorities.
Due to the NSW branch's make-up, legal and legislative action is required from both federal and state governments to ensure an administrator can take full control.
The changes would grant the administrator the powers of the state secretary and allow them to suspend office holders without remuneration.
The state's Industrial Relations Act will also be tweaked in parliament to remove any doubt about the validity of the appointment and powers of the administrator, veteran Victorian barrister Mark Irving.
Premier Chris Minns said his government and NSW Labor had taken strong action to "clean up" the construction division of the CFMEU.
"We must take the necessary action to protect honest and hardworking construction workers and union members," he said.
"It is necessary to protect the integrity of the construction sector and unions in NSW."
NSW Labor has cut ties with the union while Victorian Premier Jacinta Allan has vowed to tear the "rotten culture ... out by its roots".
Business groups have welcomed efforts to overhaul the union while calling for more to be done for lasting change.
"The CFMEU allegations are likely to be the tip of the iceberg and we need a full royal commission now to uncover how deep the rot goes," Business Council chief executive Bran Black said on Friday.