A Senegalese official said their forces would join soldiers from neighbouring Guinea who are already in Guinea Bissau.
Up to 1,700 troops from the two neighbouring nations are reported to be in Guinea Bissau.
In the capital Bissau, rebel forces have seized control of the international airport after troops guarding it swapped sides.
The former head of the armed forces, General Ansoumane Mane, has declared himself the head of a military government and called for free elections next month.
He has called on President Nino Vieira to relinquish power in the former Portuguese colony.
Trouble brewed for months
General Mane had been sacked on Saturday following a government investigation into allegations of army support for separatist rebels in Senegal.
Fighting first broke out on Sunday when a squad was sent to arrest General Mane following the appointment of his replacement.
His bodyguards fought off the arrest squad and went on to take control of a military barracks after persuading troops there to join him.
The rebellion gathered momentum with troops at a second barracks and soldiers guarding the airport joining them.
Trouble has been brewing since February when General Mane was suspended for negligence, after at least 10 army officers were arrested for allegedly smuggling arms to separatist rebels across the border in Senegal.
A BBC correspondent says General Mane is popular with ordinary soldiers but is unlikely to want to rule Guinea Bissau himself.
The Portuguese Foreign Minister Jaime Gama says contingency plans have been drawn up for the evacuation of Portuguese and other foreign nationals from Guinea Bissau.
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