The original inquest recorded a verdict of accidental death but following the publication of the Hillsborough Independent Panel's report on September 12, Grieve will apply for new inquests into the deaths that occurred during the tragedy on April 15, 1989.
The report highlighted extensive failings on the part of the emergency services and dramatically undermined the rationale behind the original inquest being restricted to a cut-off point of 3.15pm on the day of the disaster.
The original coroner, Dr Stefan Popper, relied on evidence from pathologists to determine that all those who died were already critical injured by that specific time. However, the HIP report said that as many as 41 of the 96 victims had the potential to survive had the response of emergency services been more efficient.
Grieve told the House of Commons in a statement: "Following the publication of the Hillsborough Panel Report I have been considering whether to apply to the High Court for an order quashing the original inquests and ordering new inquests to be held. The High Court will have the power to grant such an order if I place before it evidence that persuades the Court that new inquests are necessary or desirable in the interests of justice.
"My consideration of the evidence is far from complete but, given the anxiety further delay may cause the families affected by the Hillsborough Disaster, I have decided to take an exceptional course and state at this stage that, on the basis of what I have already seen, I have determined that I must make an application to the Court.
"In doing so I should make it clear that further work will need to be done before any application can be made. In particular, there was not one inquest but 96. My current view is that I will apply to have every one of those 96 inquests quashed. I believe that these deaths, arising as they do from a common chain of events, should all be considered afresh.
"However, before reaching any final view on the scope of the application, I want to give the families affected the opportunity to make any representations in respect of the family member or members they lost. I will therefore be in contact with each family seeking views.
"The application is not simply a matter of putting the Hillsborough Panel Report before the court. The application will need to be fully prepared and the evidence that underpins the report’s findings will need to be carefully considered. I want the application that is made to be as persuasive as it can be. Whilst I make this statement at this stage to reassure the families that an application will be made, it must be understood that there are legal as well as evidential issues to be considered.
"Although this work is being given a high priority, further time will be needed to prepare the application."
Grieve said he did not have the power to determine whether a new inquiry would take place in Sheffield or Liverpool as that decision would be taken by the court and coroner.
Tuesday's news comes as a fresh victory for the families of the victims, who have campaigned long and hard to have the initial verdict overturned. It is only following the publication of the monumental HIP report - which drew on over 450,000 pages of evidence - that sufficient pressure has been brought to bear on authorities.
Michael Mansfield QC, who represents the families, called the Attorney General's announcement an "extremely sensible decision ... the original inquest was conducted on a false basis and many families refused to accept death certificates until a proper, thorough and independent hearing takes place."
Steve Rotheram MP, one of the leading voices in the campaign for justice, told the BBC in response to Tuesday's news: "[This] marks one of the biggest steps forward in the fight for justice for the families in 23 years.
"The undeniable fact is that the original inquest was unsound and this application, if successful, will mean that evidence will be able to be heard after the 3.15pm cut off imposed by the original coroner in the 1989 inquests."
The Independent Police Complaints Commission and the Director of Public Prosecutions confirmed last week that the biggest ever inquiry into police conduct will be launched as a response to the HIP report which detailed South Yorkshire Police's shortcomings on the day and subsequent attempts to blame supporters in a cover-up operation.
There will be a debate on Hillsborough on Monday, opened by home secretary Theresa May.