The phrase implies that a disagreement or argument is about to happen very soon. With both sides refusing to compromise on the deal, the battle lines are drawn.
Pro Tip 2/3
Clear Division
It highlights a situation where opinions or interests are so divided that common ground is hard to find. After the meeting, it was clear the battle lines are drawn between management and employees.
Pro Tip 3/3
Stance Expression
It can be used to express strong commitment to a particular position in an argument or debate. As the election approaches, the battle lines are drawn; I stand firmly with my party's policies.