Steel producer Corus, part of the Tata Steel Group, will start to mothball its Redcar plant and up to 1600 jobs could be axed.
The Government has pledged to prevent the site's permanent closure and Tata said it is currently seeking a potential buyer. The plant has been on the market now since May 2009.
Terry Pye, Unite national officer for the steel industry, said: "Unite has reason to suspect that Corus never had any intention of selling this plant and it now intends to close the site. This will have a devastating affect on the local community.
"We are aware that serious offers have been made to Corus that would allow production to remain at the plant, but the management has dismissed them. Strike action is imminent.
India's Tata Steel is the world's eighth-largest steelmaker. It has been among the best performers in the past year, and reviving growth at its European unit Corus was expected to further increase its success.
Tata Steel shares have more than tripled in the past year, in line with the sector index.
Steelmakers across the world have announced sharp output cuts since September 2009 in response to contracting demand and plunging prices.
Analysts say underlying steel demand from emerging markets, fuelled by infrastructure spending, will not fade away overnight but projects could be put on hold or delayed as tightness in credit markets restricts the availability of finance.
In the $800bn steel industry, almost all construction projects are financed by credit facilities or bank loans. The main problem is the credit squeeze, with companies forced not to sell or to reduce quantities and the worry that customers may not be able to pay.