Schlecker managers said an insolvency petition would be delivered “shortly” to a court in Baden-Württemberg, where the company is based. A planned financing package is said to have fallen through, forcing the company's hand.
The move is not expected to have an immediate impact on the company's roughly 30,000 German employees and 17,000 abroad or result in immediate closures of its 10,000 stores.
Instead, it will buy the company time to reorganise in an attempt to keep a streamlined version of the business running.
"We believe in the viability of the company," a spokesman said.
Reports of supply shortages and financial difficulties have dogged Schlecker recently, although managers insisted all was well, and even talked of making a profit this year after several years in the financial doldrums.
But there have been signs for some time that Schlecker was struggling. Revenues declined by hundreds of millions of euros over the past two years and 1,000 branches were closed. Meanwhile the company launched a renovation campaign in an attempt to compete with more fashionable drug retailers.
A series of highly-publicised complaints from employees who have complained of mistreatment by management, and customers who accuse the chain of being old-fashioned and stuffy also added to the firm's woes.