The NHS will have a legal duty to reveal mistakes on wards and will adopt a 'culture of zero harm'.
The Health Secretary's response came after failings at Mid Staffordshire NHS Trust, which highlighted the suffering of hundreds of people.
A public inquiry has blamed a failure 'at every level' of the NHS for the abuses at Stafford Hospital that resulted in hundreds of deaths.
– Christina McAnea, UNISON head of Health
Today’s news is deeply worrying for patients, staff and local people. More than 15,000 local residents have already signed a petition calling for the hospital to keep its acute services. It is vital that these views are listened to and acted upon at all stages of the consultation process.
Hospital staff and managers have put many hours of hard work into trying to turn this hospital around after the tragic lapses of care that occurred.
There is money available to bail out banks, there should be money available to bail out vital local services such as hospitals. The government must step in.
Dr. Hugo Mascie Taylor and Alan Bloom, from accountancy firm Ernst and Young, will head the administrators.
The consultation will last 45 days followed by a 10 week review period, before any changes can be implemented.
Health regulator Monitor has appointed administrators to look at how to make services at Stafford Hospital 'sustainable'.
The board and the governor will be suspended and the administrators will take over the running of the hospital.
They will have 45 days to produce proposals which will then be open to public consultation.
The chairman of the inquiry into the scandal at the Mid Staffordshire hospital trust has welcomed the government's response to his report - but warned that it will only be judged properly "over the next few months".
Robert Francis told the Health Service Journal last night:
"Even though it is clear it does not accept all my recommendations, the government's statement today indicates its determination to make positive changes to the culture of the NHS, in part by adopting some of my recommendations and in part through other initiatives."
He added: "The overall effectiveness of the response will have to be judged on the detail developed over the next few months, and the decisions taken about recommendations on which no decision has been taken at this time."
The Head of Nursing at Unison says even if recruitment standards are consistent across the country, today's recommendations don't go far enough. Ail Adams said:
"Nurses have been trained in the fundamentals of care.
"But I think the Government has fallen short today with staffing levels. It's all very well to recommend the health watchdog NICE develops the guidelines for them to be applied locally."
"But if we look at other international models, in America and Australia they have minimum nurse to patient ratios."
Speaking to ITV News Julie Bailey, from the 'Cure the NHS' campaign, said today's announcement only amounted to a small step in the right direction.
"We know there are failings in the NHS now and there's nothing being done about it. We need to ensure the culture changes, and the behaviour of the people in the NHS, and that starts at the top.
"These were systemic failings from the ward right to the top of Whitehall. I don't seem to see anything in the recommendations to ensure that Whitehall has learnt."