If it works it will be the first of much needed capital injection in the club whose debts, according to the last accounts, were about £78m.
The rights issue has been a long time in the making and it is understand the club are conducting inquiries in the City in order to make sure this fund-raising exercise works.
Existing shareholders will be offered the right to buy more shares. However, the rights issue will only take place if the whole issue is underwritten. This means if the existing shareholders do not cough up the money and buy the new shares, then the City institutions, who act as underwriters, will take up the shares and Leeds will still get the £10m they are looking for.
The revamped board, under Professor John McKenzie, have been working towards this rights issue for some time and see the move as sending a powerful signal to their fans that the club no longer have to sell to survive. The fire sale of players is now over.
This has tormented Leeds fans in the last year, beginning with the sale of Rio Ferdinand and carrying on with the departure of players such as Robbie Keane and Jonathan Woodgate and, in the close season, the controversial transfer of Harry Kewell to Liverpool.
But since then Leeds have not sold a player. Instead Peter Reid, the manager, is being encouraged to bring in players and Roque Junior, the Brazilian World Cup-winning defender playing with AC Milan in Italy, and Cameroonian midfielder Salomon Olembe, contracted to Marseilles in France, are his targets.
Both players could arrive on long-term loan deals at Elland Road by the end of this week.