Justice Secretary Michael Gove has decided to campaign for an EU exit when the UK votes in its referendum.
The decision by Mr Gove, a close ally of David Cameron, will be seen as a coup for EU Out campaigners and a blow to the PM, said the BBC’s Political Editor Laura Kuenssberg.
The PM said he was “disappointed but not surprised” by Mr Gove’s decision.
He is expected to announced the date of a referendum later after getting a reform deal in Brussels.
Mr Gove has said he will be making a statement on his position later on Saturday.
Home Secretary Theresa May – who out campaigners had hoped would join their cause – has backed the campaign to remain in the EU.
Mr Gove’s decision was welcomed by out campaigners, with UKIP MEP Roger Helmer tweeting: “Seems that Michael Gove will campaign for #Brexit. Well done that man. Courageous and principled.”
Mr Gove is one of a number cabinet ministers, including Iain Duncan Smith, Chris Grayling and Theresa Villiers, thought likely to join the campaign to leave the EU.
They have agreed not to speak out until Mr Cameron suspends collective cabinet responsibility, enabling minister to campaign for whichever side they want in the referendum.
Mr Cameron has said he will campaign wholeheartedly for Britain to remain in a reformed EU.
Leave campaigners have been pinning their hopes on landing a big name to go up against Mr Cameron – with London Mayor Boris Johnson, who has yet to make up his mind which side to back, their top target.
There has been increasing speculation in recent days that Mr Gove would argue for an EU exit, with some commentators suggesting he would not lead the campaign.
BBC political editor Laura Kuenssberg said the former education secretary had, this week, discussed the issue with Boris Johnson.
She said Mr Gove had not yet had a final conversation with Mr Cameron but added: “It seems tonight the campaign to leave the EU has secured a big Conservative cabinet name.
“Michael Gove is not necessarily a well known political figure among the public but has for years been a close ally of Mr Cameron, and a well respected, fellow Conservative moderniser.”