Spain's government and the main opposition party have agreed to hold a new election in Catalonia in January as part of special measures to help resolve the country's political crisis.
The move is likely to further inflame tensions between Spain and Catalan pro-independence activists.
Catalonia's government said it has the mandate to secede from Spain after an illegal referendum was held on October 1, and does not want a new regional election.
The central government will hold a special cabinet session on Saturday to begin the activation of Article 155 of Spain's 1978 Constitution, which allows for central authorities to take over all or some of the powers of any of the country's 17 autonomous regions.
The measure, which has never been used since democracy was restored after General Francisco Franco's dictatorship, needs to be approved by the Senate.
Prime Minister Mariano Rajoy's conservative Popular Party (PP) has an absolute majority in the Senate, so it should pass easily as early as October 27.
However, the PP has been holding talks with the main opposition Socialist party on the best way to apply Article 155 in the Catalan crisis, in order to gain a wider consensus.
On Friday, Socialist party official Carmen Calvo said that an agreement had been reached with Spain's government on holding a new election in January in Catalonia.
Meanwhile, some bank customers in Catalonia withdrew symbolic amounts of money to protest against financial institutions which have moved their official headquarters to other locations in Spain amid the political crisis.
On Thursday, pro-independence umbrella group Crida Democracia called on consumers to put pressure on banks who made the decision to move.
By Friday morning, dozens of people were lining up at a CaixaBank branch in central Barcelona, most of them withdrawing 150 or 160 euros from ATMs.
The amounts were closest to 155, in reference to Article 155.
CaixaBank and Banco Sabadell, the largest Catalan lenders, are among nearly 1,000 financial institutions and businesses to have moved their official registration out of Catalonia in the past few weeks.
The crisis over Catalonia's quest for independence escalated on Thursday, as Spain's central government prepared to start activating Article 155 after Catalan president Carles Puigdemont refused to abandon secession.
In his latest display of brinkmanship, Mr Puigdemont sent a letter to Mr Rajoy just minutes before a deadline set by Madrid for him to backtrack on his calls to secede.
Mr Puigdemont did not give in, however, and threatened to go ahead with a unilateral proclamation of independence if the central government refuses to negotiate.
Spain's government responded by calling Saturday's Cabinet session to activate Article 155.
