Brown announced Wednesday afternoon that he is appointing a three-member board to investigate the labor dispute. The board will provide Brown with a written report within seven days.
AC Transit workers are barred by law from striking during that seven-day period, according to Brown's office.
The board will consist of chairman Peter Southworth, deputy secretary and general counsel at the California Transportation Agency; Josie Camacho, executive secretary of the Alameda Labor Council; and Micki Callahan, director of human resources for the city of San Francisco.
Brown said in a letter to AC Transit management and the union that he is appointing the board because a potential AC Transit strike "threatens to disrupt public transportation services and endanger the public's health, safety or welfare."
Amalgamated Transit Union Local 192, which represents about 1,800 bus drivers, mechanics, dispatchers, clerical and other workers issued a 72-hour notice on Monday that it planned to go on strike on Thursday if no agreement were reached.
In response, the bus agency's management asked Brown to declare a 60-day cooling-off period.
Brown spokesman Evan Westrup explained earlier today that at the end of the board's weeklong inquiry, the governor could seek a 60-day cooling-off period if he deems that step appropriate.
He would need to request a court order to do so.
A similar process was followed when BART management sought and was granted a cooling-off period in its labor dispute this summer.
In the meantime, negotiators for AC Transit and ATU Local 192 will head back to the bargaining table at 5 p.m. Wednesday to make another attempt to try to reach a labor agreement.
It will be the first bargaining session since Sept. 25, when management and union leaders reached a tentative agreement.
However, the union's members rejected that agreement in a vote on Oct. 1.
Union also members also rejected a previous tentative agreement in August. Shortly before Brown announced the formation of the board, ATU Local 192 President Yvonne Williams said the union's strike notice was still in effect but that the union had agreed to go back to the bargaining table.
"We will always try, up until the very last minute," Williams said.
Asked what she thought about having a cooling-off period, Williams said, "It's in the governor's hands now. We haven't spoken to him."
AC Transit logs about 200,000 bus rides daily in its service areas in Alameda and Contra Costa counties.
The bus agency's management says it is offering its employees a 9.5 percent pay hike over three years.