The BBC understands the government will take over the Medway Secure Training Centre, which was run by G4S.
A source said a report, commissioned by ministers to examine improvements at the centre in Rochester, would make "uncomfortable" reading for the firm.
The government said it was looking at options. G4S has declined to comment.
Police began investigating staff after the BBC's Panorama programme in January revealed assault claims at the unit.
Four men were arrested on suspicion of child neglect while a fifth was held on suspicion of assault.
All have been released on police bail.
The Ministry of Justice (MoJ) will start operating the centre through its National Offender Management Service (Noms) by the end of July, according to the source.
A new director is expected to be appointed, but staff at Medway are likely to transfer to Noms.
It will be the first time the government has run a secure training centre.
An MoJ spokesman said it would announce the next steps in due course.
He said: "Our priority will always be the safety and welfare of young people in custody - that is why the Justice Secretary set up an Independent Improvement Board to examine the running of Medway STC.
"This sits alongside a wider review of youth justice."
The Panorama programme included footage apparently showing staff mistreating and abusing inmates.
Allegations relating to 10 boys, aged 14 to 17, included use of unnecessary force, foul language and a cover-up at the centre.
Five members of staff were sacked and three more suspended, while the unit's director, Ralph Marchant, stood down.
The unit takes youths aged 12 to 17 both on remand and after conviction.
In April, it emerged further allegations had been made by a young person who had been placed at the centre since the documentary was aired.
The Ministry of Justice is to take over the running of a Kent young offenders' unit which was at the centre of claims that staff assaulted children.