Mr Balls told the House of Commons that action would be swift and that Doncaster Council had been told of the decision.
He said: "The Children's Minister has today written to the council giving them a formal direction to immediately appoint Mr Tony Elson to chair an independent improvement board which will report directly to ministers.
"[It will] require the council to submit an improvement plan to be approved by the new board and require the council to co-operate with my department to bring in a new senior management team to take over the leadership and management on Doncaster Children's Services as soon as is practicable."
Mr Winter said he had taken the decision not to seek re-election to "take the heat out" of the situation.
He said: "Because it's happened on my watch as the mayor, many councillors have been using it as an opportunity to damage me personally, to damage the mayoralty before the election in June.
"I therefore feel it's important to take politics out of this situation so that we are able to concentrate on the job in hand, and that's making Doncaster safer for children.
"So, I've decided to announce today that I will not be seeking re-election as the Mayor of Doncaster in June of this year."
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