Unite members have voted to overwhelmingly reject this year's pay offer of 3.2%.
Council workers in England, Wales and Northern Ireland were offered the increase from 1 April 2025.
However, 84% of Unite members in local authorities have rejected it in a consultative ballot.
In a statement, the union said it could now hold ballots for industrial action which could take place from late summer.
Unite general secretary Sharon Graham said: ‘Local government workers have had years of real terms pay cuts and this offer has completely failed to address that.
‘Council workers must not be made to pay the price for a funding crisis in local government that is not of their making and Unite will back them all the way in their fight for fair pay.’
