The Obama administration has pledged to pump in another $30.1bn - on top of the $20bn it has already handed the company - and take a 60 per cent equity stake in the ailing car firm.
The White House told reporters on Sunday that this would be the last public money GM gets and the company will be allowed to fail if the restructuring - expected to take between 60 and 90 days - does not work.
'The hard part'
GM's filing for "Chapter 11" bankruptcy, which allows failing businesses to restructure, follows that of Chrysler, one of GM's main rivals, which filed for bankruptcy in April.
Christopher Richter, a car industry analyst at CLSA Asia-Pacific Markets in Tokyo, said: "Now the hard part begins, which is making GM and Chrysler competitive. If they don't do that, then we'll be doing this all over again in a few years."
But Timothy Geithner, the US treasury secretary, expressed optimism that US car firms would emerge from bankruptcy and said the administration would seek to sell its share as soon as reasonably possible.
"We want a quick, clean exit as soon as conditions permit," said Geithner, while on a trip to Beijing.
"We're very optimistic these firms will emerge [from restructuring] without further government assistance."
GM will be carved up into two new companies.
"Old GM" will have all the "bad" assets such as the run-down car plants and brands such as Pontiac, Hummer and Saturn in it, while "New GM" will contain all the "good" bits such as money-making car plants and popular brands such as Chevrolet, Cadillac, GMC and Buick.
GM's total liabilities of $185bn break down into:
$27bn in unsecured debt
$25.5bn in government and bank loans
$20bn owed on healthcare and pensions
$112.5bn in other debt
The bankruptcy protection petition, if approved, would be the largest ever industrial Chapter 11 bankruptcy in US history and the third largest overall behind the telecoms giant WorldCom and investment bank Lehman Brothers.
The path for Monday's filing was cleared after shareholders agreed to accept a deal to swap the firm's $27bn debt for stock in the new restructured version of the car maker.
At a meeting over the weekend, 54 per cent of shareholders decided to exchange their unsecured bonds for a 10 per cent share in the new firm and warrants to purchase a greater share of the new GM in the future.
The 54 per cent represents only $14.6bn of debt, and GM would like to clear all of its $27bn unsecured debt, but establishing bondholder support in advance increases the likelihood of a judge applying the improved offer to all of the firm's unsecured debt.
Rise and fall
Founded in 1908, GM rose to dominate the US and global car industries under the stewardship of Alfred Sloan, its then chief executive, who famously pledged the firm would deliver "a car for every purse and purpose".
By the mid-1950s, at the peak of its success, GM had about 514,000 employees and it accounted for about half of US new car production.
But in recent years, GM and the US car industry in general has been hit hard by a slump in sales amid a recession in the US and the global financial crisis.
Henderson, who was put in place as GM's chief executive after the Obama administration pushed out Rick Wagoner, his predecessor, is expect to continue to steer the new company.