A team of experts to oversee the work of Swansea council's social services department are to be appointed.
It is the first time such a board has been created in Wales and follows concerns that the local authority was failing to protect young people.
Deputy Social Services Minister, Gwenda Thomas said it was "a very serious step to take" and another inspection would follow by January 2010.
Swansea Council said it has already improved its children services.
The assembly government's interventions follows two critical reports into how the council protects children.
The new independent board, which has yet to be appointed, will monitor the department's daily work and will report to assembly ministers regularly on progress.
Ms Thomas said Swansea's chief executive was disappointed with the decision.
"They had hoped that I would have been more confident that the improvements achieved to date would have continued and been consolidated," she said.
"However, the authority recognised why I was considering this action in view of the report on the December 2008 inspection by the Care and Social Services Inspectorate."
The council has already appointed a new councillor to take responsibility for social services, in anticipation of the decision.
Nick Tregoning, Swansea Cabinet Member for Social Services, said, "Our priority is to ensure vulnerable children are safe and receive the most appropriate support from us.
"Thanks to the commitment of our staff and the support of the CSSIW we have been able to introduce a number of improvements to our services.
"We have already produced a draft action plan to address the areas for improvement identified in the CSSIW report and we welcome the opportunity to develop it further in consultation with CSSIW and the Intervention Board.
"We will also be working closely with the Welsh Local Government Association and the Social Services Improvement Agency who will support our improvement plans.
"The deputy minister has recognised the improvements we have made and has stressed the need to bring quicker and longer-lasting improvements.
"We are determined to continue and accelerate these improvements with the support of the Intervention Board so that we can meet the needs of vulnerable children and their families."