It is understood the move puts thousands of steel workers jobs at risk, including at the Port Talbot Steelworks in Wales.
The firm's Board has now instructed its European holding company to "explore all options for portfolio restructuring including the potential divestment of Tata Steel UK, in whole or in parts".
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Tata Steel added: "Given the severity of the funding requirement in the foreseeable future, the Tata Steel Europe Board will be advised to evaluate and implement the most feasible option in a time bound manner."
In a joint statement, both the UK and Welsh Governments said: "This is a difficult time for workers in Port Talbot and across the UK. During the review process, we remain committed to working with Tata and the unions on a long term sustainable future for British steel making.
"Both the Welsh and UK governments are working tirelessly to look at all viable options to keep a strong British steel industry at the heart of our manufacturing base."
(LM/MH)
