The society's decision, due to be announced on Monday, is the latest in a stampede by most of the UK's top-10 building societies to abandon mutuality.
It comes as members of National & Provincial yesterday voted massively in favour of a pounds 1.35bn takeover by Abbey National at an emergency meeting in Manchester.
Bristol & West refused to comment yesterday on whether it was planning to make an announcement over its own mutual status. However, the society closed its doors to all new business in a desperate bid to halt a last- minute rush by thousands of speculators hoping to gain from the takeover frenzy.
A spokesman said: "We decided to stop people from opening a new account with us unless they are existing customers. It became apparent that the level of new accounts opening was having an adverse affect on our existing customers.
"This was because the queues were so long we could not provide the level of service we would like. The rush did not come as a surprise and I think we have managed to stop it before it became a problem. We intend to keep the ban on until rumours of a merger have died down."
Sources said yesterday that Bristol & West, which has in effect put itself up for auction for several months, has chosen Bank of Ireland as the best candidate among a range of suitors thought to include Allied Irish Bank and National Australia Bank.
Its discussions are thought to have led it to the Building Society Commission, the industry regulator, to ask how to abandon mutuality.
A price tag is not known. When Cheltenham & Gloucester was bought by Lloyds last year, qualifying savers with the C&G received an average windfall of pounds 2,100.
Banking analysts speculated yesterday that the acquisition could cost Bank of Ireland between pounds 600m and pounds 800m.
A higher price would lead to a bigger payout, of up to pounds 750, for Bristol & West's 1.2 million savers and 200,000 borrowers.
However, one analyst said this was unlikely: "Unlike C&G and some of the societies that have announced their flotation plans in recent months, Bristol & West is not as well focused. It has had a disproportionate share of debt and repossessions although it has taken large strides in the past two or three years to eliminate the problem."
In the past six months Bristol & West has been linked with a number of predators, including financial services to tobacco group BAT and insurance giant Prudential.
Bank of Ireland, formed in 1783, is based in Dublin and has assets of more than pounds 18bn. The bank, which is quoted on the London Stock Exchange, employs about 12,000 staff at almost 500 branches, most of them in Ireland.
In 1987, the Bank of Ireland bought a mortgage lending operation in the UK from Bank of America. The UK business, based in Reading, has a 260- strong staff and a mortgage book valued at more than pounds 2bn in 1995. Bank of Ireland Mortgages works primarily by offering home loan packages through life insurance companies and independent financial advisers.
However, in common with most centralised lenders, who borrow their money on the wholesale markets, it suffered significantly from bad debt problems in the early 1990s but is thought to have largely recovered.
One source said that for more than a year, Bank of Ireland senior executives have followed a strategy involving the takeover of a suitable UK mutual lender. Bristol & West, among other societies, was carefully considered but did not emerge as favourite until more recently. A Bank of Ireland spokesman said yesterday: "Our policy is that we never comment on any acquisition rumours."