Barclays (LSE: BARC.L - news) is to close its controversial tax avoidance unit as part of a drive to distance the bank from the perceptions of a "casino" banking culture which flourished under Bob Diamond, its former chief executive.
Sky News can reveal that Antony Jenkins, Barclays' new boss, will announce on Tuesday that it will wind down and close the division which was responsible for generating hundreds of millions of pounds in profit for the bank.
He will say that while legal, the tax avoidance schemes devised by its structured capital markets business were toxic for Barclays' reputation.
Mr Jenkins will commit to avoiding transactions whose sole purpose is to access tax benefits, according to a senior source inside Barclays' investment bank who has been briefed on his plans.
I have also learnt that the Barclays boss will also unveil a set of binding tax principles that will dictate the mandates in which the bank's executives are permitted to be involved.
During his appearance this week in front of the Parliamentary Commission on Banking Standards, Mr Jenkins said that the structured capital markets operation would be "changed" but he did not say it would be closed altogether.
Lord Lawson, the former Chancellor and a member of the Commission, accused Barclays of engaging in "industrial scale tax avoidance".
Mr Jenkins' announcement will be made amid a robust debate about corporate tax avoidance and at a difficult time for the reputation of Barclays and the wider banking industry, mired as it is in mis-selling scandals and a multi-agency investigation into the manipulation of the benchmark interest rate, Libor.
It is unclear what impact the tax unit's closure will have on Barclays' profitability, but its lucrative nature has not deterred Mr Jenkins' decision.
The news will be disclosed alongside Mr Jenkins' broader vision for Barclays as it emerges from the most significant crisis in its recent history.
It is unclear whether executives who work in the tax advisory unit will be reassigned elsewhere within Barclays, or whether some will leave.
Mr Jenkins is cutting a substantial number of jobs in its investment bank , further details of which will be outlined on Tuesday.
I understand that among the other measures that Mr Jenkins will announce as part of his effort to rebuild Barclays' reputation, he will say that Barclays will reduce the proportion of revenue generated by its investment bank that is paid out to staff.
Historically, Barclays has been among the most generous payers in the City, paying out 45% or more of revenues to employees in salary, bonuses and benefits.
After it bought the US operations of Lehman Brothers in 2008, Mr Diamond oversaw an aggressive push to help the bank compete with the likes of Goldman Sachs (NYSE: GS-PB - news) and JP Morgan on Wall Street.
For 2012, Mr Jenkins is expected to say that the proportion of revenue paid to staff in Barclays' investment bank stood at approximately 38%, and he will pledge to reduce that in the coming years to a level much closer to 30%.
The new Barclays chief will also signal that he plans to re-balance the ratio between dividend and bonus payments following an outcry from shareholders last year.
The bank paid three times as much to employees as it did to investors in 2011, and although he will not make a specific pledge about how far that will change, he is expected to reassure shareholders that he acknowledges their concerns about the issue.
Mr Jenkins has already waived his own bonus for 2012, conceding that the bank’s £290m Libor-rigging fine and multi-billion-pound bill for mis-selling payment protection insurance and interest rate hedging products made the decision inevitable.
"Barclays is fundamentally changing," one insider close to Mr Jenkins said on Saturday.
Barclays will be the first of the big UK banks to announce annual results for 2012 next week.