Rangers have given Sports Direct formal notice that they wish to end their retail deal for club merchandise.
But the contract between the two requires a seven-year notice period unless Sports Direct agrees to end it.
On Wednesday, Rangers won their latest legal battle against the company controlled by Newcastle United owner and Rangers shareholder Mike Ashley.
Club chairman Dave King said: "The club has formally given notice to end the relationship with Sports Direct."
Sports Direct, which entered the joint venture with Rangers in 2012, this week halted litigation after claiming a breach of confidentiality over the commercial deal, with Justice Peter Smith describing its court action as "ridiculous".
However, the dispute with Rangers is poised to continue, with King saying the club are "reserving our right to proceed with challenges to the existing suite of contracts and side agreements in a court of law" despite handing in their notice to the retailer.
The retail arrangement, agreed by a previous Rangers board, means that the Glasgow club earn about 4p in every pound spent in their Ibrox store.
In a statement on the club's website, King praised the board for a "resounding success in court proceedings" against Sports Direct.
The South Africa-based businessman told the club's fans that, despite that, Rangers' position was improving both financially and on the field of play.
"The club is in a substantially better position - on and off the pitch - than it has been for some time," he said on Rangers' website.
"The board continues to ensure that the club is run within the balance required to secure success on the pitch while simultaneously funding the cash shortfall that is required until we have a sustainable business model.
"The club has not secured fair value for much of its expenditure over the last few years. Under the present board, that is no longer the case."
King said the board had not only invested substantially during pre-season on player and management contracts but had stuck by its promise to back team boss Mark Warburton to improve the squad further during January.
He said that, in addition, there had been:
1. Substantial investment in Rangers' training ground at Auchenhowie, with a "broken operation that we inherited last year now being fully-functional again".
2. Investment in Ibrox Stadium and its surrounds, which had been "severely neglected by prior boards that were intent on massive cost-cutting measures" and this would "take some time" to complete.
Meanwhile, King said work was ongoing to merge existing supporters groups into a new organisation that would bring fans closer to the club and "increase the supporter shareholding position".