Inspectors upped Essex County Council's overall judgment following an inspection in November 2018, after it found the department to be "good" in 2014. It was rated "inadequate" for safeguarding in August 2010.
An inspection report heaped praise on the authority's "inspirational" director of children's services (DCS) Helen Lincoln, who replaced Dave Hill in 2017, now DCS in Surrey.
The report said Lincoln and senior managers lead a team of social workers with low caseloads and high morale.
"They have created a culture in which staff are valued, supported and encouraged to be creative in their practice in order to make a positive difference to children," it states.
"Social workers have a thorough understanding of the children they work with and are passionate about improving outcomes for them.
"Inspectors saw sensitive, creative examples of direct work with children and young people to help them to understand their heritage and individual circumstances and participate in their own planning."
Ofsted awarded the authority outstanding in all areas except "the experiences and progress of children in care and care leavers", which it found to be "good".
In this area inspectors said the vast majority of children's plans, including early help and child in need plans, were of high quality, but identified a minority of cases involving disabled children where plans could be further strengthened with more time-specific actions and a more ambitious child focus.
"Senior leaders have reviewed disabled children's services and are taking action to strengthen consistency and share the strongest practice across teams," the report said.
Nevertheless, it said children in care benefited from an effective children in care council, were well supported in their education, and care leavers benefitted from "timely and persistent support by personal advisers, who know them well".
Across the service, Ofsted found clear focus among staff, timely working, effective inter-agency approaches and appropriate recording of events.
It noted the department was underpinned by a shared understanding across Essex that children should be supported to grow up in their own families, when safe for them to do so.
"Inspectors saw the model fully embedded across all services and teams on this inspection," said the report.
"Staff have a clear understanding of the model, and build strong relationships, getting to know children and families and using family strengths to help identify strategies which enable them to achieve and sustain positive changes and improve outcomes for their children."
The area's children and families hub provided "an efficient single point of entry to early help and children's social care", inspectors observed.
"Staff in the hub quickly and accurately establish the level of risk and need for children.
"They have a clear focus on supporting children and families with the right level of help at the right time, so that they do not receive statutory intervention unnecessarily," inspectors found.
They also commended the hub's ability to conduct "good-quality child protection strategy discussions" if risk increased for children, which led to "effective planning and interventions for families".
Inspectors noted that young people aged 16 and 17 who were homeless or at risk of becoming so had their needs routinely assessed by a social work qualified homeless youth specialist and a housing colleague.
"Together, these professionals effectively explore actual or potential risks associated with going missing, criminal and sexual exploitation, and/or other vulnerabilities," the report said.
"They work closely with a range of teams, including the assessment and intervention teams, the divisional based intervention team, youth offending teams and police vulnerability officers in order to provide effective wrap-around help and support for young people, and suitable accommodation where appropriate."
Essex was also found to be tackling gang-related activity and child exploitation effectively by working with partner agencies.
Essex County Council cabinet member for children and families Dick Madden said he was proud of the achievement.
"We have invested in our staff, improved practice and developed innovative methods but all the time we have ensured at the heart of everything is the drive to improve the lives of our vulnerable children and their families," he said.