Senior councillors had been asked to sign off on an agreement to let the companies run by Azeem Hafeez provide transport for children with special educational needs (SEND) in the borough until 2025 at a cost of more than £20 million.
But new council leader Rajbir Singh, chairing his first cabinet meeting, stepped in before the matter could be put to a vote to confirm a decision was being deferred.
Councillor Singh said he was "aware of a number of concerns being raised" and that he needed to be satisfied "the proper process had been followed".
The Express & Star reported on Wednesday prior to the decision how serious concerns had been raised by opposition Conservative councillors about the move to award companies run by Mr Hafeez, North Birmingham Travel and County Cars, the contracts. They were the only two firms successful in a closed bid tender process.
Mr Hafeez is the son of former council deputy leader Mahboob Hussain. Both were at the centre of the 2016 Wragge report, which alleged code of conduct breaches by ex-Councillor Hussain.
Mr Hafeez, 36, was arrested over the scandal before he was released without charge and the investigation was dropped. He denied any wrongdoing.
Conservative councillors accused council officials of "looking after their mates" by selecting Mr Hafeez's companies and said it showed the Labour-run authority was "making the same mistakes".
Leader Councillor Singh told the cabinet meeting: "I'm aware of a number of concerns being raised.
"I think it's appropriate we first satisfy ourselves the proper process has been followed before any decision is made on this matter.
"This decision is not because of the procurement outcome or the recommendations in the report."
The land sales probe overshadowed Sandwell Council during the mid-2010s. Part of it looked at the sale of the Crocketts Lane Coroner’s Office in Smethwick, which was sold to Mr Hafeez for £80,000 in May 2013.
Mr Hafeez, a council employee at the time, put in a bid for the site the day before it was advertised for sale, it was said. The report said the sales were "likely to be the result" of confidential information being shared between Mr Hussain and his son. Mr Hussain was later found to have abused his position as a councillor by the authority.