"I searched for all possible solutions and I hoped until the very last moment but a new debt of several million lei came out of nowhere," Dinamo president Ionut Negoita said in an open letter after the club submitted their application with a Bucharest court.
"Our conclusion is that (filing for insolvency) is the only solution at the moment."
Dinamo are one of the two most successful clubs in Romania alongside bitter city rivals Steaua. They have won 18 league titles, 13 domestic Cups, two Supercups and reached the 1984 European Cup semi-finals.
The club, however, have experienced serious financial troubles recently, especially after former owner Cristian Borcea was sentenced to six years and four months in prison for tax evasion and money laundering in March.
Borcea was among eight soccer officials, who were jailed with the court finding that the state lost 1.7 million euros ($2.33 million) in taxes and several clubs lost 10 million euros because the officials registered false sums for the transfers of 12 players between 1999 and 2005.
Dinamo, founded in 1948, became the fifth Romanian team to file for insolvency in the past two years after Rapid Bucharest, Gloria Bistrita, Universtitatea Cluj and Otelul Galati.
Many Romanian clubs face considerable infrastructure difficulties and are struggling to meet administrative, legal and financial conditions laid down by European soccer's governing body UEFA.
Dinamo are fourth in the standings on 53 points with two matches remaining and will book their place in next season's Europa League second qualifying round if they retain that position.
"Dinamo obtained licenses for the Romanian league and Europe, so they can participate in the Europa League," said Viorel Duru, the head of the Romanian federation's licensing commission.
"There's no problem for us and I don't see any reason why UEFA may exclude Dinamo." ($1 = 0.7294 Euros) ($1 = 3.2365 Romanian Leus)
- Sports & Recreation