Speaking on Friday night at the Princess of Asturias Awards - Spain's answer to the Nobels - King Felipe described Catalonia as "an essential part of 21st century Spain".
As it acquires control of Catalan ministries, Madrid will assume responsibility over security, public order, finance, tax and budgetary measures, and telecommunications, a government statement indicated.
Meanwhile, Prime Minister Mariano Rajoy's Cabinet was meeting to outline the scope and timing of the measures the government plans to take under Article 155 of the Spanish Constitution.
The slow-burning constitutional crisis over secession escalated this month when regional government officials held a disputed independence referendum on October 1.
Mr Rajoy said he wants the senate to give him permission to dissolve the regional government in Barcelona and call early elections.
And though she opposes the independence drive, Barcelona mayor Ada Colau also deplored the decision, tweeting: "Rajoy has suspended the self-government of Catalonia for which so many people fought".
Puigdemont says he has a mandate to declare independence after the referendum, which his administration says resulted in a 90 percent Yes vote.
There are fears of unrest if Madrid seeks to impose direct rule of any kind, and Catalan leader Carles Puigdemont has said such a move could push regional lawmakers to declare unilateral independence.
Basque nationalists and the far-left Podemos party were among those in Madrid opposing the government's move.
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He accused the separatists of "liquidating the Spanish Constitution" and failing to respect local laws when they rushed legislation permitting a referendum on independence through the Catalan parliament in early September.
He is proposing that the powers of Catalan officials be taken over by central government ministers.
Supporters say the region does too much to prop up the rest of the national economy and would thrive if it went its own way, but opponents say Catalonia is stronger as part of Spain and that a split would spell economic and political disaster.
The Spanish government after an emergency meeting on Saturday will forward to the President of the Senate PIO Garcia Escudero specific proposals.
His proposals, under the never-used-before article 155 of the constitution, will nevertheless put an end to Catalonia's home rule prerogative, and mark an escalation of Spain's biggest political crisis since a failed coup d'etat in 1981.
Rajoy said Friday that the goal of revoking Catalan self-governance is "the return to legality and the recovery of institutional normalcy".
The article allows central authorities to intervene when one of Spain's 17 autonomous regions fails to comply with the law. "It is my wish to call an election as soon as normality is restored".
The State Attorney General José Manuel Maza confirmed on Saturday that "a complaint is being prepared for rebellion" against the President of the Generalitat of Catalonia, Carles Puigdemont, and other independence leaders.
Mr Puigdemont is expected to make a formal response to the government's measures in a speech later this evening.