A report by Ofsted said the council had taken a "systematic and rigorous approach to improvement", with recruitment of effective senior managers resulting in sustained progress since the last Ofsted inspection in 2014.
The 2014 inspection was triggered by a damning report by professor Alexis Jay, which estimated that up to 1,400 children in the town were sexually exploited over a 16-year period.
But Ofsted inspectors found that improvement efforts since then have paid off.
"The quality and impact of services for children are transformed," the report states.
"Risks to children are recognised early and responded to, ensuring their safety. The corporate response and associated change in the quality of children's services has been impressive."
Inspectors said corporate ownership, well-cultivated partner relationships and increased financial investment enable children's services to be "highly responsive to local needs".
They praised the creation of a dedicated multi-agency team to focus on complex abuse work and investment in identifying and supporting children who are at risk of sexual exploitation.
"Since the last inspection in 2014, the local authority has made significant progress in the identification and support of children in need of help and protection, including those who are at risk of child sexual exploitation," the report states.
"During this inspection, of the children's cases sampled, no children were found to be unsafe. Overall, children are effectively and more swiftly helped and safeguarded."
The report also praised the "wide range" of accessible and good-quality early help services delivered through locality teams, youth services, children's centres and the troubled families offer.
And support for care leavers was given an individual rating of "outstanding".
Chief executive of Rotherham Council Sharon Kemp said the inspection findings were "great news for children, young people and families in the borough".
"Our focus as a new senior leadership team at the council has been improving outcomes for children and young people," she said.
"It is very pleasing to see that this commitment by so many staff across the council has made such a difference with our services significantly improved.
"It is important to recognise the many partners who have played a large role in our improvement and I thank them for their continued support and proactive engagement.
"We are committed to continuing to improve, and addressing the recommendations within the report will be our focus as we continue to support our children, young people and families."
Rotherham's director of children's services Ian Thomas, who took charge of the department in January 2015, said: "The last report talked about the importance of strong effective leadership and strong governance and to ensure that the standards against which we are measured be widely shared, understood and adhered to.
"We have made these changes and more right across children's services, which is due to the grip and pace we have insisted upon, no matter how difficult this was at times.
"We will use the recommendations in the report to develop our new action plan as we are determined to build on this judgement and continue to improve. We owe this to the children here in Rotherham today.
"My thanks go out to all staff here at the council, not just in children's services, who have helped us face our challenges."
Rotherham is one of three children's services departments to be upgraded out of "inadequate" today.
Earlier this month the independent trust set up to improve the quality of children's services provision in Doncaster was rated "good" following a re-inspection by Ofsted, two years after it received the lowest rating.
