Unions criticised the move as not in customers' best interests
Almost 4,000 retail banking jobs are to be cut by the Royal Bank of Scotland across the UK.
RBS said there would be 3,700 losses, or about 14% of its high street retail banking workforce.
The bank it hoped to achieve most of the cuts through voluntary redundancy over the next two years.
An announcement is expected tomorrow from RBS, Lloyds Banking Group and the Treasury about the sell-off of parts of each of the major bank groups.
By Douglas Fraser, BBC Scotland Business and Economics Editor
The loss of one in seven RBS branch jobs is going to hurt employees, obviously, but it's not good for the bank's reputation either and it's politically painful.
The scale of cutback is no surprise to those who have been watching RBS's plans roll out, but it's the part of banking with which customers have most sympathy.
The people now under threat are the human face of banking, they're the front line in communities throughout the country, and their modest salaries are not boosted by vast bonuses.
That makes it difficult for the Government to explain why, as majority shareholder, it is allowing this level of redundancy during a recession, and with unemployment rising.
It's claimed this is not a result of the bank's balance sheet nightmares. The rationale is that RBS has under-invested, and needs to cut out administrative inefficiency.
The remaining staff, it is argued, will have more time to spend dealing directly with customers. And of course, more customers are choosing to bank online and by phone.
While this announcement is not directly connected to the imposed sale of RBS assets - with an announcement on that imminent - it's no coincidence that the Royal Bank is getting this difficult news out the way at the same time that it's also facing bruising conditions on its government support, handed down by European competition commissioner Neelie Kroes.
RBS said it was over-staffed compared with competitors and needed to trim costs, and that the cuts were unconnected to Tuesday's planned announcements.
Brian Hartzer, chief executive of UK Retail said: "We need to do better for all our customers and shareholders by modernising the way we operate as a bank.
"We have 30% more staff carrying out administrative duties per customer than our competitors and they spend less than half their time dealing with customers - we can and must do better.
"The job losses this means are deeply regrettable but are necessary."
Stuart Davies lead officer with the Unite union, criticised the move saying it was not in the customers' interest.
He told BBC Scotland: "Customers want to return to a more traditional level of banking, they want to actually go into a branch.
"They want to be able to speak to somebody, they want to be able to sort out a problem there and then and face-to-face with someone they know and someone they trust.
"Relying on the use of machines, relying on the use of the internet is no substitute as far as we're concerned for front line banking."
Finance Secretary John Swinney said: "This is, of course, enormously disappointing news for the staff impacted.
"I accept RBS' commitment to minimise compulsory redundancies. We will continue our already productive engagement with RBS through the Finance Sector Jobs Taskforce to identify appropriate intervention."
Labour leader Iain Gray said: "We will work with the unions and if there are any job losses that are not voluntary RBS must fully justify them.
"It is crucial that the Scottish government sits down with RBS as quickly as possible to see what contribution they can make to mitigate any job losses."
Scottish Liberal Democrat leader Tavish Scott said: "Today's announcement shows that big banks are a law unto themselves. It doesn't matter what the Chancellor or the First Minister say or how big the taxpayers' investment is.
"Every taxpayer, not just in Scotland but across the UK, will wonder what their money is being used for as thousands of banking jobs continue to be lost.
The firm has already unveiled 10,000 job cuts in its investment banking and back office activities in the UK, and a further 6,000 redundancies in overseas operations.
It has a total workforce of 170,000, of which 105,000 are in the UK.
RBS has 340 branches in Scotland, and 312 in England and Wales and under the NatWest brand, RBS owns 1618 branches, five of which in Scotland.
Tuesday's announcements are set to include approval from the European Commission of plans to cut back the size of the banks with disposals of branches and other assets.
The Commission had demanded that banks bailed out by taxpayers should be scaled down.
It is not yet clear how the Commission will indicate its backing for the plan. However, a source close to the talks told the BBC that barring last-minute legal technicalities, a full announcement would be made on Tuesday.
By Hugh Pym, Chief economics correspondent
This will be a big day for British banking, the latest chapter in the bailout saga.
A series of announcements anticipated at Lloyds and RBS will tie up the loose ends of the asset protection scheme announced in February. This was intended to provide a taxpayer insurance scheme for toxic loans. Lloyds has decided it can stay out and go it alone, with its own mammoth capital raising on the private markets. RBS will need to join the scheme, though on slightly different terms to those envisaged earlier this year.
Hovering in the background is the European Commission, which has demanded that banks bailed out with state aid should scale themselves down. A big asset sale will be announced. Under the hammer will be hundreds of RBS and Lloyds branches and insurance businesses such as Direct Line.
The government hopes that these asset sales will attract new players into the banking market. That remains highly uncertain, as does the reaction of the banks' shareholders.
RBS has already warned that it may have to sell more of its businesses than originally planned to gain European approval for state support it has received since coming close to collapse last year.
On Tuesday, it is set to announce the sale of its insurance businesses Direct Line, Churchill and Green Flag as well as more than 300 bank branches, according to BBC chief economics correspondent Hugh Pym.
For its part, Lloyds will announce the sale of Cheltenham & Gloucester and Intelligent Finance.
On Friday, the BBC reported that Lloyds Banking Group was set to end weeks of speculation by announcing it would not join the government's asset protection scheme.
Lloyds believes it can survive without joining the scheme and is prepared to pay a fee of close to £2.5bn to avoid it, by selling shares to the government at a reduced price.
The banking group, 43% owned by the taxpayer, is thought to want to avoid the additional government influence which comes with the scheme.
BBC business editor Robert Peston says that this represents another massive transfer of wealth from Lloyds' private-sector shareholders to the state.