The Government will keep a "close eye" on crisis-hit Kensington and Chelsea council, communities secretary Sajid Javid has said.
The intervention comes after both the council leader and deputy leader resigned having come under intense pressure in the wake of the Grenfell Tower disaster.
Residents and victims have blasted the council’s handling of the tragedy, in which at least 80 people are believed to have died.
Mr Javid said: "It is right the council leader stepped down given the initial response to the Grenfell tragedy.
"The process to select his successor will be independent of government, but we will be keeping a close eye on the situation. If we need to take further action, we won't hesitate to do so."
Outgoing leader Nicholas Paget-Brown said he had to share responsibility for "perceived failings", departing alongside deputy Rock Feilding-Mellen.
The council has now been hit by three high-profile resignations in the aftermath of the fire, with chief executive Nicholas Holgate also exiting.
The Labour Party launched a drive for the council to relinquish its handling of affairs until the crisis was brought under control, with a string of party figures weighing in.
Mr Khan, who welcomed the resignation, said the Government had "no option" but to appoint "untainted" commissioners who had "a genuine empathy for local people and the situation they face" to take over running the authority.
He said: "The council now needs to find a way to move forward and find a way to restore the confidence in that community.
"That can only be done with new leadership and a new approach that reaches out to residents who quite rightly feel desperately neglected.
"I feel the response from the council and subsequent breakdown in trust is so severe that there is now no alternative and the Government needs to step in quickly."
Shadow housing secretary John Healey said the move would amount to "specific, immediate, obvious and necessary action", while shadow communities secretary Andrew Gwynne added the powers should be used to "get a grip on what has gone dreadfully wrong".
Meanwhile, Yvette Williams, one of the organisers of the Justice 4 Grenfell campaign group, said the community would not accept commissioners imposed on them without consultation.
She said Grenfell survivors and victims' families are "very, very angry" and claimed that one former resident called her on Friday to reveal their rent for the tower block had been deducted from their bank account.
A cabinet meeting by Kensington and Chelsea council was shut down on Thursday after he realised journalists were in the room, claiming the presence of reporters could jeopardise the inquiry.