The firm said the move would also give it greater flexibility to react quickly to acquisitions and other corporate transactions if "opportunities arise".
The company said Aim was a "more appropriate market" for a company of its size. As well as reduced costs it would lead to simpler administration.
Havelock Europa's market value has shrunk dramatically over the past five years. In 2006, its shares were trading at 158p compared with yesterday's close of just 10.5p, valuing the company at just over 4 million. In the past year, the company has lost 80 per cent of its value.
Havelock Europa is one of the longest-standing of Scotland's shrinking list of main market quoted companies, having joined in 1987. The fall in its market value has left it by far the smallest main market company in Scotland.
Approval for the proposal will be sought at a shareholder meeting on 1 July and the move to Aim is expected by the end of that month.
The company is currently without a chief executive after the surprise resignation of long-standing boss Hew Balfour in April following more than 20 years at the helm.
Interim chief executive David Hurcomb also recently announced he was moving on to take up a role with building services firm NG Bailey in Yorkshire.
Havelock – whose exceptional costs have soared on the back of problems with merging its retail interior and education supply operations – issued three profit warnings in the six months leading up to Balfour's departure.
In April, Havelock blamed cutbacks by retailers during the recession for a pre-tax loss of 5.9m for 2009, following a profit of 7.7m previously. The retail interiors business was particularly badly hit.
The company booked 3.2m of exceptional costs after moving its retail interiors manufacturing operations from Dalgety Bay to join its educational interiors arm in Kirkcaldy. The group employs about 1,000 throughout the UK.
In a trading update released to accompany the preliminary results, Havelock reported a 16 per cent rise in new orders since the start of the year to 34.6m, with the company appointed as one of four contractors for Lloyds Banking Group. New customers have included mobile phone giant Orange and retailer H&M.
The company is not expecting a return to normal trading conditions this year and work for the educational interiors business is expected to fall amid a dearth of PFI schools contracts.