The law office, which peaked with a staff that included 1,400 attorneys, said it plans to liquidate the firm, The New York Times reported Tuesday.
Court papers say the law firm has $315 million in liabilities, owing money to former partners, its landlord and banks.
The firm, which began in 1909, would hold onto 90 staff members to unwind its debts and assets.
"This is a very sad day for the legal profession," former Manhattan judge Richard Holwell told the Times.
"Dewey is a fabled firm with a lot of great lawyers and a demise of this magnitude is unprecedented," Holwell said.
Analysts said the firm grew too fast and promised its top lawyers salaries that were too high. Several, the Times said, made $5 million per year.
In 2007, Dewey Ballantine merged with LeBoeuf, Lamb, Greene & MacRae to form Dewey & LeBoeuf.
To some the merger, which came just as the recession was settling in, represented the trend of corporate law firms growing beyond their culture of elite experts to cost-conscious behemoths.
"Because the partnership lacks any shared cultural values or history, money becomes the core value holding the firm together," said William Henderson, a law professor at Indiana University.
"Money is weak glue," Henderson said.