The news was confirmed on Tuesday in a letter sent to the council's interim chief executive, Kim Bromley-Derry, who has been appointed as commissioner and thus will remain the senior civil servant but will be supported by Government-appointed staff.
It is only the fourth time in the last six years such action has been taken at a local authority and comes in the wake of a series of scandals in Sandwell.
The council has had six leaders in the last six years, and three chief executives in the last three years, due to a bitter war between factions in the ruling Labour Party.
Current leader Councillor Kerrie Carmichael told the Express & Star: "Business will carry on as usual for the people of Sandwell. I hope this decision was not a political one, as the people of Sandwell deserve better to be used as a political football.
"We acknowledge today’s announcement by the Government. My vision for Sandwell is to be a borough that is totally focussed on the needs of our residents, where everyone can fulfil their potential and be proud to live here.
"It’s welcome that external reviews have now recognised ‘green shoots’ of recovery are clearly visible. But we know there is much for us still to do, and we have a clear plan to drive improvement."
She added: "We will of course work very closely with the Government and all our partners to continue to progress and maintain our focus on delivering high-quality services our residents can rely on.
“I am delighted that Kim Bromley-Derry will be staying on as part of this work. He’s been so important in the positive changes we’ve been making, and will provide the continuity we need to carry on with the improvements we’ve already begun putting in place.
"We remain fully committed to providing what our residents want – to live in clean and safe neighbourhoods, to have somewhere to turn when times are tough, and to be proud to call Sandwell home.”
The main objectives of the commissioner and assistant commissioner, whose taxpayer-funded wages are both north of £1,100 per day, is to restore public confidence in the democratic institutions of Sandwell.
The objectives laid down by the department are: "To continue to rebuild the governance capacity of the Authority, addressing the deep-seated culture of poor governance and leadership; to restore public trust and confidence in the Authority by putting an end to any of the Authority’s activities, practices, and omissions which are, or risk being, not compatible with the best value duty."
The letter to Mr Bromley-Derry was sent by Max Soule, the deputy director of local government stewardship at the Department for Levelling Up.
The Government has previously intervened in the running of Rotherham in 2016 and Slough and Liverpool last year.
In his letter, Mr Soule told Mr Bromley-Derry he had been appointed as the commissioner for a two-year period and noted that he will continue working part-time at McLaren Construction Group.
He added: The Secretary of State has also nominated Jim Taylor as Assistant Commissioner and expects that you will work closely with him to deliver improvement at the Council."
He said: "In addition to the administrative support you will be provided by the Council, the Department has made arrangements for a civil servant to be appointed as your Chief of Staff, and further resource could be made available during the intervention as required.
"Should you have any queries or issues either now or during the Directions period please contact me in the first instance. I would like to take this opportunity to thank you for assisting in this intervention. We are very grateful for your commitment to taking up this challenge to improve the performance of Sandwell Metropolitan Borough Council so that it effectively serves and protects the people of the area."
Old Warley Conservative Councillor Jay Anandou welcomed the Government intervention.
He said: "This is good news for the residents of Sandwell! Year on year, the perennial failings and mismanagement have resulted in an intervention."
Top of Councillor Anandou's wish list is for Brandhall Golf Club and green space to be saved from developers.
He said: "At a time where the effects of climate change and the benefits of open space for physical health and mental wellbeing have been emphasised during the recent Covid pandemic, we argue that it would be far more beneficial for the local community and the environment as a whole for this site not to be developed."