The department store chain, which has stores in Meadowhall and The Moor, is facing administration for a second time.
The retailer is set to appoint administrators early this week to protect the company against claims from creditors as it tries to restructure its business.
Debenhams has already closed 22 stores this year and plans to shut a further 28 in 2021.
Sheffield health: McKenzie practice in Broomhill ends GP work after ‘inadequate’ verdict from CQC
Sheffield man prepares to jump from plane in memory of beloved mum wanted to be by his side
GP patient survey 2022: The best and worst rated surgeries in Sheffield revealed
The best and worst dentists in Sheffield according to NHS patient reviews
Surgeries pull out of £37million Sheffield GPs health centre plans, as public reveal travel concerns
However, the coronavirus outbreak has ramped up pressure on the firm with all 142 of its UK stores closed.
The business is still trading online, but stores have huge amounts of stock which cannot be sold.
A Debenhams spokesman said: "Like all retailers, Debenhams is making contingency plans reflecting the extraordinary current circumstances.
"Our owners and lenders remain highly supportive and whatever actions we may take will be with a view to protecting the business during the current situation."
It is expected that the most likely outcome is a pre-pack administration, where a company arranges to sell its business to a pre-determined buyer before administrators are appointed.
Last April, Debenhams fell into the hands of its lenders, comprising a group of banks and hedge funds led by US firm Silver Point Capital, after struggling for years to keep up with competition from rivals.
It has also faced rising costs in running its big stores as well as grappling with a huge amount of debt.