The British airline has been forced to cancel 300,000 bookings while 2,100 people will be out of a job.
The Civil Aviation Authority (CAA) has been asked by the Government to charter more than 30 aircraft to bring the passengers home.
Transport Secretary Chris Grayling said it is Britain’s ‘biggest peacetime repatriation’ effort.
CAA chief executive Andrew Haines said the decision to stop trading would be ‘very distressing for all of its customers and employees’.
“We are putting together, at very short notice and for a period of two weeks, what is effectively one of the UK’s largest airlines to manage this task,” said Haines.
“The scale and challenge of this operation means that some disruption is inevitable. We ask customers to bear with us as we work around the clock to bring everyone home.”
Monarch customers who are due to return to the UK in the next two weeks will be flown home, the regulator has promised.
The flights will be at no extra cost to passengers and they do not need to cut short their stay, the CAA said.
Passengers have been warned to expect disruption and delay as the government works to make sure there are enough flights to return the ‘huge number’ of passengers.
Grayling said: “I have immediately ordered the country’s biggest ever peacetime repatriation to fly about 110,000 passengers who could otherwise have been left stranded abroad.
“This is an unprecedented response to an unprecedented situation. Together with the Civil Aviation Authority, we will work around the clock to ensure Monarch passengers get the support they need.
“Nobody should under-estimate the size of the challenge, so I ask passengers to be patient and act on the advice given by the CAA.”