Owner Balram Chainrai took the decision after failing to strike a deal with four potential buyers in time for the winding-up order in the High Court on Monday.
Portsmouth will now be docked an automatic nine points – a move which virtually ensures their relegation from the Premier League.
Administrator Andrew Andronikou, will now begin the process of cutting costs at the south coast club to try to keep it as a viable entity.
The move comes just days after a report prepared by European governing body, Uefa, highlighted the poor financial state of the English top-flight, revealing that Premier League clubs’ debts are more than the rest of Europe’s clubs put together.
Figures for 2007-2008 show the total debt of Premier League clubs as being £3.4bn – 56 per cent of the total across Europe. And this doesn’t even take into account Portsmouth and West Ham, who had not been granted Uefa licences that year due to their financial problems.
At the same time, Premier League clubs do have £3.8bn of assets, accounting for 48 per cent of all assets across Europe, although the fact assets and liabilities are so close is cause for concern in itself.