A formal ballot for strike action opens on Monday 5 October for workers at six Barnsley nursery sites.
The dispute centres on pensions and plans to transfer the services to another provider.
GMB says staff had previously been told they would be able to keep their Local Government Pension Scheme benefits following the transfer. Barnsley Council says subsequent legal advice found employees would not be eligible to remain in the scheme.
The ballot raises the possibility of future disruption for families using nurseries in Wombwell, Worsbrough, Athersley, Grimethorpe, Penistone and Thurnscoe.
Workers are being balloted on strike action. No strike dates have yet been announced.