Prime Minister Mariano Rajoy is likely to be forced out of office after a key party said it would support a motion of no confidence against him.
The no-confidence vote is scheduled to take place on Friday and was tabled by the opposition Socialist party.
Socialist leader Pedro Sánchez needs a majority of 176 votes to become leader.
The Basque Nationalist Party (PNV) has said that it will support the motion, which may then propel Mr Sánchez into office.
The party holds a crucial five seats in parliament and announced its intentions on Thursday.
Mr Sánchez has called on Mr Rajoy to step down ahead of the vote, but he has so far refused to do so.
Why was the vote called?
Mr Sánchez tabled the motion of no confidence after Mr Rajoy's centre-right People's Party (PP) was implicated in a huge corruption scandal.
He said Mr Rajoy had failed to take responsibility for his party's involvement, which came to light last week after one of its former treasurers was given a 33-year jail sentence.
The High Court in Madrid convicted Luis Bárcenas of receiving bribes, money laundering and tax crimes.
The case centred on a secret campaign fund the PP ran from 1999 until 2005.
Many Spanish voters, exasperated by corruption scandals involving the traditional centre-right PP and centre-left Socialist parties, have abandoned them for newcomers like the left-wing Podemos (We Can) and centrist Ciudadanos (Citizens), as well as regional parties.
Could Mariano Rajoy step down?
"Resign, Mr Rajoy, your time is up. Resign and this no-confidence motion ends here, today and now," Mr Sánchez said during the debate in parliament on Thursday.
"Staying on as prime minister is harmful and is a burden not only for Spain but also for your party."
Mr Rajoy insisted he would stay put, adding: "Why should I have to resign, if for now I still have the trust of the house, and the trust awarded to me at the ballot boxes? You are the one who should be resigning around here."
However, it was later confirmed that the PNV would support the no-confidence motion, effectively forcing Mr Rajoy from office.
"We believe we are responding to what most Basques want and best complying with our responsibility by voting yes (to the motion)," said party spokesman Aitor Esteban.
The PM did not return to parliament on Thursday afternoon, raising further speculation about his intentions.
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