The move follows Ofsted inspectors reporting that while there are signs of improvement at Worcestershire County Council, lingering problems remain within the "inadequate"-rated service.
In light of the findings the DfE has ordered the county to push ahead with plans to create a council-owned company to take over the operation of its children's social care service.
Under the DfE's latest directions, the council must establish the company by April 2019. The company, which will be called Worcestershire Children First, will then shadow the council's service before taking over the service in October 2019.
Ofsted's latest monitoring visit to Worcestershire found the council had "realistic understanding" of the improvements needed.
Inspectors also said the council is succeeding in its efforts to recruit more social workers and reduce caseloads.
However, the inspectorate also found the service still relied on informal decision making and that plans for children still need to improve. There were also gaps in oversight of cases, it added.
"It is not clear who is monitoring the progress of plans between reviews," Ofsted reported. "This means that children are potentially left in situations of risk for too long."
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Councillor Andy Roberts, the cabinet member for children and families at Worcestershire County Council, said: "I am pleased that the hard work that our staff have been putting in is being recognised. The report talks of a positive morale amongst our social workers and their managers and inspectors have seen an increase in confidence.
"But there is a lot more that we have to do and this council will continue to make the improvement of children's social care in Worcestershire our top priority."
Ofsted issued Worcestershire children's services with an inadequate grade in January 2017 after finding the council was leaving vulnerable children at risk of harm and failing to do enough to support care leavers.
Following the inadequate rating, the DfE sent a children's services commissioner into the authority to oversee its efforts to improve. Essex County Council was also appointed as the council's improvement partner.
Following a September 2017 review of the service that cast doubt on the county's ability to improve, the DfE told Worcestershire to draw up plans for an alternative way of delivering its children's social care service.
This led to the council proposing to hand over running of children's social care to Worcestershire Children's First, which will be wholly owned by the local authority.