The Government says power and resources should shift from Oranga Tamariki to communities, so children and their whānau are at the centre of the system.
The agency has also been told that the highly controversial uplifts should only be used as a last resort after adequate engagement with whānau.
It comes after Oranga Tamariki, the government department responsible for the well-being of children, has been plagued with numerous issues for years, resulting in the resignation of former chief executive Grainne Moss earlier this year.
In light of these issues and multiple damning reviews and inquiries, a Ministerial Advisory Board led by Matthew Tukaki was created.
Children's Minister Kelvin Davis said he wanted the board to be honest with him and get to the root of the problem. The board released its findings today.
“What they provided was a confronting, yet powerful report and I am pleased to say the Government has accepted all their recommendations," Minister Davis said.
It found the Crown had assumed the lead role around supporting children, "without really knowing how to be effective", undermining the role of communities and particularly of hapū and iwi, the report read.
The three overarching recommendations were to strengthen Māori and community responsibility and authority, clarify the purpose of Oranga Tamariki and reinforce the focus on social work, and that a national Oranga Tamariki Governance Board should be established to ensure the changes.
The report found that the social workers were under significant pressure, the needs of tamariki Māori and whānau were not well served by the current system and that coming into even brief contact with the system reinforce and cause further damage to "already vulnerable and hurt tamariki and their whānau".
It recommended the Governance Board have the mandate, capacity, and capability to ensure collective government accountability.
Minister Davis said the board was "unable to provide assurance that the operating model and practices of Oranga Tamariki are fit for purpose.
"Therefore, the Government has accepted all its recommendations," Minister Davis said.
The changes would see "a major shift in decision making and resources at a local level, empowering communities to work together with Oranga Tamariki in the prevention of harm against children".
Oranga Tamariki had also been given a clear direction that uplifts, or without notice orders, should only be used as a last resort.
He said an Action Plan had been developed, with an independent Governance Board established to ensure progress remains on track.
"The new direction for Oranga Tamariki has been set.
"A plan has been put in place for change and alongside the members of my Ministerial Advisory Board and the leadership of Oranga Tamariki we are going to change the system.
"I want Oranga Tamariki to be the enabler that allows the regions to decide what is right for their particular area. To empower communities and Māori to help children and their families in a way that works for them."
Oranga Tamariki acknowledged it needed to be a high performing, highly trusted agency that should support and help communities put in place services that will work.
It released the timeline for its transformation.
The first six months will see the establishment of a leadership team to drive change and "set culture", development of a new operating model, reset Oranga Tamariki regional boundaries and strengthen the complaints system.
It will work with iwi and community leaders in each region and develop options so it can get more detailed information on cases, such as the needs of tamariki and whānau.
The next six to 12 months would see the end of uplift orders without "clear evidence of solid engagement or attempts at engagement with whānau".
It would also see locally led ways of working driven through a new operating model. That would also see resourcing decisions at both the regional and national level. That time period should also see a bigger investment in early support.
Then, the long term, one to two year timeframe seeks to see tamariki and rangatahi at the centre of decision making, the development of a workforce strategy and a centralised data warehouse to help decision making.