GM has filed for Chapter 11 bankruptcy protection.
The bankruptcy filing is the third largest in US history, following banking giant Lehman Brothers' collapse and the failure of telecoms giant WorldCom.
The 24-page filing reportedly listed $82.3 billion in assets and $172.8 billion in debts.
The documents list the company's largest creditors, including a trust company that holds more than $22 billion in bond debt. The United Auto Workers union is owed $20.5 billion.
Spin-off supplier, Delphi Corp is owed $110 million, while other large banks issued a total of $5 billion in debt. There are a number of other large car suppliers among its 50 largest creditors.
GM will use the court protection to split in two - "Old GM", with all the "bad" assets like defunct car plants - and "New GM", which will own the "good" assets, such as viable factories and brands like Chevrolet and Cadillac.
It is expected to use the bankruptcy protection application to announce it will close 11 plants and idle three others.
"Today marks a defining moment in the reinvention of GM as a leaner, more customer-focused, and more cost-competitive company that, above all, can quickly generate winning bottom line results," said Fritz Henderson, GM president and CEO. "The economic crisis has caused enormous disruption in the auto industry, but with it has come the opportunity for us to reinvent our business. We are going to do it once and do it right.
"The court-supervised process we are pursuing provides us with powerful tools to accelerate and complete our reinvention, as well as strong safeguards for our customers and our business. We are focused on the job at hand, for the benefit of our customers, employees, dealers, suppliers, retirees, taxpayers, investors and other stakeholders."
"From day one, the New GM will be well-positioned to capitalizs on the award-winning vehicles we have developed and launched during the past few years, and on our investments in exciting new technologies like the Chevy Volt, so that we can build and return value to our customers and to the millions who will have a stake in our success. The New GM will play a critical role in the future of the automobile, and assure that the U.S. has a strong stake in this rapidly changing global manufacturing industry."
The Chapter 11 filing is also expected to lead to GM receiving $30.1 billion (£18.3 billion) in US government loans. In exchange, the US government will take a 60 per cent stake in the company, while the governments of Ontario and Canada will take 12.5 per cent each in exchange for providing funding.
In return, the federal government will have the right to replace GM's current board of directors with its own trustees, except for one director, who will be picked by the Canadian government, and another who will be selected by a UAW-administered retiree health care trust.
The government wants the restructured company to be able to break even on ten million annual car sales - previously, it needed to sell 16 million cars a year to break even.
GM Europe, which has entered final negotiations for a sale to Canadian car parts firm Magna, will not be affected by the filing, as it has been placed in a trust.
General Motors Corporation (GM) was founded in 1908, with its headquarters in Detroit, Michigan.
It employs around 250,000 people world-wide and sells and services vehicles in 140 countries.
It was once the largest company in the world, but has been driven to bankruptcy because of high production costs and by the collapse in credit markets and consumer spending. It lost $30 billion (£18.5 billion) last year.
Brands under GM ownership include Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Hummer, Pontiac, Saab and Saturn.
In 2008 it was the world's second-largest car maker after Toyota; prior to that, it was the world's biggest seller of cars for 77 consecutive years.
Reports that GM's headquarters would be moved from its base in the Renaissance Center in Detroit have been dismissed as speculation.