Rotherham Council's Cabinet is to resign after being branded "not fit for purpose" and "in denial" about its shortcomings by an independent government inspection.
They will leave their posts "as soon as transitional arrangements can be put in place", according to a statement.
Government commissioners will be sent to the town to improve standards at the council and early elections will be held.
The inquiry was set up to assess Rotherham council's ability to handle revelations that 1,400 girls were subjected to sexual abuse over a period of 16 years.
It found that: "In particular, it is failing in its duties to protect vulnerable children and young people from harm."
Louise Casey's report was published as it was claimed a police officer and two local politicians have been accused of having sex with underage girls in Rotherham.
The Independent Police Complaints Commission would not confirm that it had received an allegation of sexual abuse by a police constable but said that so far there had been 20 complaints against ten South Yorkshire officers in relation to their handling of the child sexual exploitation investigation in the South Yorkshire town.
The National Crime Agency also refused to say if it was investigating two councillors but said it was expanding its investigation in light of the new findings.
The report described an "unhealthy" culture within the South Yorkshire authority, with evidence of sexism, bullying and suppressing bad news.
It also cited difficulties within the council when dealing with issues of race and said it has been damaged by "misplaced political correctness".
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Gallery: Who's Who in The Rotherham Abuse Scandal
Roger Stone - Leader of Rotherham Borough Council from 2003 to 2014. Resigned when the report was published in August last year.
Shaun Wright - Former Police & Crime Commissioner and Cabinet Member for Children's Services until 2010. Resigned following intense pressure, three weeks after the report was published.
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