Serco, one of the stakeholders in Together for Children, was named as the preferred bidder to take on the running of the city's children's services department.
Four private companies had been shortlisted for the job after the DfES intervened to send in advisers late last year following a crisis in the council's children's services department.
The 5m, three-year contract will be jointly funded by the city council and the Government, and Serco is expected to start work next month.
The name of the new external director and details of the senior management team are to be announced shortly.
Councillor Ian McLaughlan, who leads on Children and Young People, said, 'Our new director comes with a good track record. He will fit in well with the council's new drive for excellence and will certainly get the job done.'
Debbie Jones will remain as interim director of children's services for the next three months until the new director can start, the council said, to ensure a smooth transition.
Elaine Simpson, managing director of Serco Education and Children's Services said, 'We are delighted to have secured preferred bidder status with the council in this critical area of service to Stoke-on-Trent. We are passionate about helping all children and young people reach their full potential and are really excited to be working in partnership with the council, stakeholders and the children and young people of Stoke-on-Trent and their families. We know that together with the council we can make a real difference to the life chances of children and young people in the city.'