Labour group leader Aidan Godfrey has been elected as council leader after being supported by the Stafford Borough Independents and the Greens.
The Conservatives had run a minority administration prior to this month's local elections but lost six seats, with then-council leader Patrick Farrington among the casualties.
Labour made three gains to finish on 13 seats, one behind the Tories, while the Stafford Borough Independents have seven seats. The Greens now have five seats after making four gains, while the Lib Dems have one.
At the council's AGM on Saturday Common ward councillor Mr Godfrey, who was first elected in 1995 and is a former borough mayor, was voted in as leader.
He told the Star that while balancing the books would be a major challenge, he was keen to press on with plans to revitalise the town centre.
Mr Godfrey said: "I am grateful to the people of Common for re-electing me and also grateful to the councillors who have put their faith in me as leader.
"We have an awful lot to do in the four years ahead. We will need to keep a close eye on finances, as would any organisation that had seen its budget nearly halved over 12 years.
"It is a case of being sensible with the money that we have got. We are very fortunate in that we received some good money from the Future High Streets Fund that will help to make the improvements that are desperately needed to the town centre.
"The appearance is not as we would want and in order to attract businesses and to bring in investment we need to make changes.
"It is that economic growth that will help create jobs in Stafford."
Councillor Rob Kenney, who represents St Michael's and Stonefield for Stafford Borough Independents, has been named as deputy leader.
He said: "The message from the electorate was a clear call for change and we feel that Aidan offers the best chance for positive change.
"We look forward to working with all councillors and officers to address the priorities of our communities in the days and weeks ahead."
Conservative councillor Andy Cooper, who represents Haywood and Hixon, has been voted in as borough mayor for 2023-24.
Mr Godfrey was set to announce his full cabinet at a meeting last night.