Several retailers have shown significant financial distress this year, with both Maplin and Toys R Us disappearing from the high street.
A spokesman for the firm said: "Poundworld will continue to trade while a buyer for all or part of the business is sought".
A source told Sky News that discussions about a rescue deal between Poundworld's owner, TPG Capital, and Rcapital, had fallen apart over the weekend, days after a bid from Alteri Investors, another turnaround company, had also been terminated.
'Unfortunately, this has not been possible.
A TPG spokesperson said it was a "difficult decision for every party involved".
"We invested in Poundworld because of our belief in how the company serves its customers and the strength of its employees", he added.
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This coming a year after the Department of Agriculture's Inspector General finished their investigation in June 2017. But, the Department claimed that it had properly handled their employee's malfeasance upon learning of his failure.
Deloitte, which has been co-ordinating efforts to find a solvent deal for the business, is expected to oversee the administration of Poundworld.
Poundworld, which has its headquarters in West Yorkshire, was formed in 2004, but it says it can trace its origins "back to 1974 and a market stall in Wakefield, West Yorkshire".
Losses reportedly jumped to £17.1million in 2016 to 2017, from £5.4m the year before.
The high street has also been rocked by a succession of retailers and restaurant chains unveiling plans to shut down stores to reflect tougher trading conditions.
A raft of CVAs have been struck in recent months as retailers struggle amid surging costs, rising business rates, competition from online rivals and a slowdown in consumer spending.
Others undertaking CVAs include New Look, Mothercare and Carpetrights.
There has previously been speculation that Poundworld was going to axe 100 shops but if the budget store goes into administration, it means all of its 355 shops face potential closure.