But despite finally deciding to axe the show's star presenter, the BBC is planning to continue broadcasting Top Gear on BBC2.
According to well-placed sources, senior executives at the Corporation have been wooing Radio 2 Breakfast Show host and self- confessed 'petrol-head', Chris Evans in the hope he will agree to take over.
Evans, 48, who has one of the most prestigious car collections in Britain, including a £12 million 1963 Ferrari 250GTO, had previously ruled himself out of the running, but bosses are keen to persuade him to sign up.
It is not clear whether Clarkson's co presenters James May and Richard Hammond will remain with the programme or will join Clarkson on any new ventures.
It is thought Clarkson may sign for American network Netflix, which is becoming increasingly popular with global TV audiences.
Despite feeling he has been left with no alternative but to sack Clarkson, Lord Hall is expected to thank him for helping to build Top Gear into one of the Corporation's crown jewels and praise him as a "brilliant broadcaster".
Sold to more than 170 countries around the world, the programme, which was re-launched in its current format in 2002, generates an estimated £50 million a year for the BBC.
It is understood Lord Hall will defend Clarkson's controversial and politically incorrect style of broadcasting and say there is a place at the Corporation for that style of presenting.
And while he made the decision with a heavy heart, sources said he felt he had been left with no choice after an internal investigation concluded Clarkson had attacked a junior member of staff.
According to a report compiled by BBC Scotland boss Ken MacQuarrie and submitted at the weekend, Clarkson verbally abused Mr Tymon for 20 minutes, before physically attacking for at least 30 seconds .
The 'fracas' as it was initially described by the BBC took place at the Simonstone Hall hotel near Hawes in North Yorkshire when Clarkson was informed that there was no hot food available after a day's filming.
Clarkson, who has a seven figure contract with the BBC, was suspended on March 10 after reporting himself to his bosses over the incident.
His suspension led to a huge wave of support from the show's fans with more than a million people signing an online petition to reinstate him.
Even the Prime Minister, who is a neighbour of Clarkson, weighed into the row when he described him as being a "huge talent".
But a series of controversial incidents, including allegations of racism, forced BBC bosses to issue Clarkson with a final warning last year.
With Evans already a popular and established broadcaster, who has appeared on Top Gear on a number of occasions, his appointment would be seen as a safe bet.
But the decision to continue with the programme will still be regarded as something of a risk for the BBC.
For many Top Gear fans it was Clarkson's irreverent and near the knuckle brand of humour that helped make the show so popular.
But his frequent controversies created a headache for bosses at the publicly funded broadcaster, who were regularly forced to defend embarrassing situations or comments.
In 2012 he sparked complaints by the Indian High Commission after making a series of derogatory remarks about the country during a road trip there.
During a show filmed in Burma last year he use the word slope, in a manner that critics claimed had been deliberately racist and was also forced to apologise after appearing to use the N-word during a segment that was never broadcast.
Last October he also caused chaos in Argentina after driving a car with a number plate H982 FKL, which local Falklands War veterans claimed was an act of deliberate provocation.
