The council is seeking to judicially review the decision to scrap nine projects in its Building Schools for the Future (BSF) programme.
Education Secretary Michael Gove announced the news in the summer - halting BSF schemes not signed off by 1 January, 2010.
The council says this was unfair because its BSF schemes were ready to proceed before this date but it had to stick to a timetable imposed by Partnerships for Schools, the quango running BSF.
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Council leader Cllr Darren Cooper said: "We are taking legal action because the Government's decision is irrational, unfair and shortsighted.
"Why did they chose 1 January as the cut off date? Was it just plucked out of the air? If we had been told that was the deadline we would have met it.
"Instead we did what we were told and spent money on preparatory work in good faith. Given the circumstances we believe we have no alternative but to mount a legal challenge."
At the time of the announcement, the Government caused dismay in Sandwell after wrongly saying none of the borough's projects would be axed – the nine were included on a revised list shortly afterwards.
The council is waiting to hear how it will fare in a Government review of capital investment – money earmarked for things like buildings - due to report this month.
It is currently developing plans for three BSF projects - Oldbury Campus, Tipton Campus and Wednesbury Campus.
(CD/GK)
