Birmingham City Council's 23 stand-alone community day nurseries are most at risk, with more than 200 nursery staff facing redundancy.
The council plans to move its daycare services from these nurseries into children's centres.
Public sector union Unison said the plan has the potential to close all of the city's council-run nurseries and could result in redundancies for all 214 nursery staff working in maintained settings.
The council has told trade unions that it plans to cut the early years budget for nurseries and children's centres from April 2010/11 by £1.45m and from 2011/12 by £2.5m.
The council has given a formal notification to unions of potential job losses, at the start of a 90-day consultation process.
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