The Attorney-General warns the onus is now on Bill Shorten to live by the same standard he has demanded of the government when it comes to the dual-citizenship debacle.
It is understood the independent Senator has informed the Turnbull Government and Senate colleagues she may resign over the section 44 issue.
Lambie revealed to the Tasmania Examiner last week her father was born in Scotland and she was "proud" of her roots.
Lambie, who is also writing an autobiography and intends to run candidates in the Jacqui Lambie Network party at the next state election, said she would run again at the next federal election.
An emotional Lambie said she had spent the last week going through her documents with her father and couldn't find evidence he had renounced.
Shell sells part of Woodside interest for $1.7bn
Shell said it is selling the shares to two investment banks and expects the deal to be completed on Tuesday. Australia blocked a takeover bid by Shell for Woodside in 2001 on national interest grounds.
On Tuesday, she told Tasmanian radio station LAFM Launceston it was "quite clear" she held dual citizenship and said she would officially quit the Senate shortly after midday.
I can see how all these politicians are only just having the ancestry chat with their parents now; it's not like this dual citizenship thing has made much of a stir in Aussie politics recently...
Senator Lambie had previously released a statement saying she was satisfied her parents were both Australian citizens.
The dual citizenship saga, which kicked off in July when two Greens Senators resigned after discovering they held dual citizenship, has plagued the parliament for months now and continues to threaten Prime Minister Malcolm Turnbull's delicate majority.
Lambie was first elected to parliament in 2013 as part of the Palmer United Party, but quickly split from then-leader Clive Palmer and established her own brand.
Her replacement in the Senate will be determined by the High Court. To try end the citizenship crisis, all MPs will be forced to disclose their heritage by December 1st which could trigger several by-elections and completely upend parliament.