Homebase, which has 241 stores, said the 42 stores would be shut over the next 16 months.
Chief executive Damian McGloughlin said: "This has been a difficult decision and one that we have not taken lightly.
"Homebase has been one of the most recognisable retail brands for almost 40 years, but the reality is we need to continue to take decisive action to address the under performance of the business and deal with the burden of our cost base, as well as to protect thousands of jobs."
Alvarez & Marsal will carry out the CVA, which will require the support of landlords. Creditors will vote on the CVA on August 31.
Homebase said rental costs were "unsustainable" and that many stores were loss making in an "extremely challenging" trading environment: "Under the terms of the CVA proposal, all creditors receive a better outcome than any other likely alternative."
Some 17 Homebase stores have already closed this year and the business has also cut 303 jobs at its head office in Milton Keynes.
Hilco is stripping out costs to make the business an attractive proposition for resale, possibly in 2019. If Hilco sells, Wesfarmers will get 20% of the equity uplift.
Steve Pitcher is now running garden buying. More former B&Q staff are expected to join the buying team. Homebase has a market share of about 7% and that is made up of 25% gardening in the season.
Among suppliers to Homebase are Ivan Ambrose, Newey and Florna.
Florna's Ian Howard said the closures were expected and were in Hilco's plan. He said: "It's very sad for those concerned but it was anticipated and of course it is the poor performing stores they're cutting out. From our point of view we've been planning around that from spring onwards. The reserves placed have numbers allowing for that reduction in the estate."
BPOA's Simon Davenport said: "This means the loss of more outlets which can't be a good thing. It's a question of how much will be replaced by other outlets."
Wesfarmers reported full year profits of A$1.19bn ($861.4m) for the year to June 30, a 58% drop, mainly caused by write-offs linked to Homebase. Wesfarmers has said Homebase exit costs were $1.4bn.
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