"This is an extremely sad day for everyone connected with the club," Peter Storrie, Portsmouth's chief executive, said.
"However, by this course of action Balram Chainrai [the owner] has kept the club alive and given someone an exceptional opportunity to take this great club on with fresh investment to steer Portsmouth in a positive direction."
Chainrai, Portsmouth's fourth owner this season, chose to apply for bankruptcy protection after he was unable to clear the club's debts of around $105m.
The Hong Kong businessman took over the club this month as a short-term arrangement to protect his investments after becoming frustrated that several deadlines were missed to repay $25m loans he had made to the club.
"He asked the questions and was given answers and assurances that turned out not to be true," Phil Hall, Chanrai's spokesman, said.
"He feels he's a victim - the club have been overwhelmed by these debts and he is a reluctant owner."
In a hearing earlier this month, Portsmouth had been given time to secure new funding or a new owner but they failed on both fronts.
Portsmouth have raised $153m in player sales in the last 20 months but are still about $106m in debt.
Andrew Andronikou, the appointed administrator from accountancy firm UHY Hacker Young, will now try to strike deals with the club's creditors and could cancel players' contracts.
Storrie, who will leave Portsmouth after the process is complete, said: "It is my intention to work with the administrator to help sell the business and I hope that will be quick as there is already interest in acquiring the club."
The Premier League board will now meet to invoke the nine-point sanction.
"The board will also meet the administrator at the earliest opportunity to receive their views on the financial status of Portsmouth FC and set out the conditions for the club to fulfil its commitments for the remainder of the season," the Premier League said in a statement.
"We understand the need to act as swiftly and transparently as possible; however there is a process which means we can only provide comment at the appropriate junctures."
Fifa, world football's governing body, is set to discuss the plight of the 112-year-old club at its next executive committee meeting on March 18.
Pompey have been in administration once before, in December 1998, when Milan Mandaric bought the then-second tier club.
Mandaric invested heavily in the team and it returned to the top flight in 2003, but the south-coast club overspent on player transfers and salaries.
It won the 2008 FA Cup for its first major title since 1950 but after spending £55m - 78 per cent of its turnover - in salaries that season, the
club began to implode financially.
Gordon Brown, the British prime minister, expressed concern about the high levels of debt in English football earlier this year.
Simon Lewis, a spokesman for Brown, said on Friday: "It is a sad day for a great club and it is deeply regrettable if they do go into administration.
"We remain concerned that fans and communities of football clubs like Portsmouth shouldn't suffer because of the inability of clubs to manage their finances properly."