Santander apply for voluntary administration
"Today isn't a good day for the club and it will be very hard now to have to tell the players and the suppliers who we owe money to," club president Francisco Pernia told a news conference.
"[We are] thinking of the club and in avoiding bigger problems such as relegation to Segunda B (the third tier). It's a problem of cash flow and of access to credit."
Racing explained in a statement released earlier that they had been forced into the move due to the complex institutional situation that had been provoked by the sale of the club to Ahsan Ali Syed.
The Indian businessman, the founder and chairman of investment company Western Gulf Advisory, bought a majority stakeholding in the club in January.
However, last month, Racing asked the previous owners, Dumviro Ventures, and the regional government to step in if Ali Syed failed to honour his financial commitments.
"[The club is in] a complicated legal position that was impossible to solve in the short term," Racing said on their website.
Racing finished 12th in La Liga last May and have just appointed Argentine Hector Cuper as their new coach.
They are one of a number of top-flight Spanish clubs with serious financial problems.
Racing join fellow La Liga sides Real Mallorca and Real Zaragoza, and the three newly-promoted teams Real Betis, Rayo Vallecano and Granada in administration.
A study by a professor of accounting at the University of Barcelona published last month showed that the 20 clubs in the top flight made a combined net loss of some 100 million euros in the year to the end of June 2010, up from 19 million in the year-earlier period.
Total debt fell slightly from the previous year, to 3.43 billion euros, but was still more than double revenue of 1.61 billion euros.