Up to 40 armoured personnel carriers have been seen moving towards the area where protesters have been camped for two months.
Soldiers have made an announcement from outside the barricade, warning protesters to leave the site immediately.
Many troops can be seen massing around the perimeters of the site in various directions.
It is unclear whether they are reinforcing a perimeter cordon or will attempt to enter the site, which is still home to a few thousand people.
Last night troops moved sandbags onto SkyTrain bridges around the outer barricades.
Intermittent gun shots can be heard and it is understood that Red Shirt leaders have told vulnerable people to move into a temple within the site.
Others have been warned that they may have to fight.
Helicopters have moved in and a water cannon has been used against some protesters.
A senior official trying to broker a peaceful resolution to the Bangkok standoff has warned of "unbearable" loss of life as Thai troops move in on the Red Shirt protest site.
"Negotiations are over now," said General Lertrat Rattanavanich, one of a group of 60 senators who attempted to mediate between the government and the Red Shirts, who defied a Monday deadline to disperse.
"The government has chosen to decisively enforce the law. The signals are that absolutely the army will win, but the losses will be unbearable.
"Certainly based on all the signs that I have seen there will be a crackdown, not a containment."
Troops have reportedly fired warning shots ahead of a possible operation to evict the anti-government protesters from their camp in the middle of the Thai capital.
The Department of Foreign Affairs is advising Australians in Bangkok to stay indoors.
"We are receiving reports of significant movement of troops near the rally site in Bangkok," it said.
By South East Asia correspondent Zoe Daniel
For live updates you can follow Daniel's twitter or #redshirts
Thai soldiers backed up by armoured vehicles have broken into the Red Shirt protest camp in the heart of Bangkok, as a senior official trying to broker a peaceful resolution to the stand-off warned of "unbearable" loss of life.
An Associated Press reporter has seen the bodies of two people in the protest zone in central Bangkok as Thai troops stormed into the camp.
BANGKOK (AP) -- The Thai government has claimed that the army has been successful in its initial push to clear a protest zone in central Bangkok.
Government spokesman Panitan Wattanayagorn claimed protest leaders have fled the area. But one of the leaders, Nattawut Saikua, appeared on stage in the protest zone several minutes before Panitan spoke and said he has not fled.
Channel 9 television station also said that Nattawut and two other leaders were still in the protest zone Wednesday.
Panitan says "our security operation to secure the (protest zone) around Bangkok has been successful."