Paul Lakin, leader of Rotherham Borough Council has resigned with immediate effect.
Cllr Lakin - who only took on the top role last year - will also stand down as local councillor for Rotherham's Valley Ward, the council said in a statement.
The rest of the cabinet are due to resign their positions "as soon as transitional arrangements are put in place", according to an earelier statement.
Louise Casey, the head of the Government's Troubled Families Unit, headed the inspection into Rotherham Borough Council and says she was shocked by what she found.
South Yorkshire's former Police and Crime Commissioner Shaun Wright refused to be interviewed as part of an inspection of the borough's council, the author of today's damning inspection report said.
Wright - who had been a councillor in the town and responsible for children's services - resigned in the wake of a previous report by Professor Alexis Jay, which claimed that more than 1,400 children had been abused in the area between 1997 and 2013.
The council's former leader Roger Stone also declined an invitation for interview.
Despite other resignations in the wake of that report - such as that of chief executive Martin Kimber and director of children's services, Joyce Thaker - Louise Casey's more recent inspection found a continued denial of any wrongdoing among current council leaders.
When inspectors commenced work in Rotherham, we were struck by the overwhelming denial of what Professor Jay set out in her report. This attitude was so prevalent that we had to go back through many of the aspects of her work in order to satisfy ourselves that the council had no grounds upon which further action could be delayed.
Casey added: "When asked, 70% of the current Rotherham councillors we spoke to (including those in the Cabinet) disputed Professor Jay's findings."
The National Crime Agency today said there were "a number of potentially criminal matters" identified in Louise Casey's report into Rotherham Council.
In a statement on its website, the NCA said: "Communities and Local Government Minister Eric Pickles today informed Parliament of the outcome of an inspection conducted by a team led by Louise Casey. A number of matters have been referred to Operation Stovewood as they potentially fall within its terms of reference.
"It would not be appropriate to comment in detail about the matters referred until investigators have an opportunity to analyse the information, which they will do as part of phase one of the investigation.
"The NCA can confirm that the matters referred are allegations of potential criminal behaviour. Operation Stovewood is not investigating any misconduct matters."
Rotherham Council is currently incapable of dealing with its problems "without substantial intervention", Communities Secretary Eric Pickles has said.
Speaking to MPs in Westminster, Pickles proposed government-appointed commissioners to deal with issues where the authority is currently failing.
He also called for an all-out election at the council in 2016.
Rotherham Borough Council's cabinet is to resign in the wake of Louise Casey's damning report "as soon as transitional arrangements can be put in place", the council said.
"Sexist and bullying" behaviour was and still remains an issue within Rotherham Council, a damning inspection into the organisation has indicated.
Today's damning report featured claims that a previous mayor of the town had said "in his year of mayoral officer it was his right to kiss all the pretty ladies in his office".
"I remember thinking, 'this is so Rotherham,'" the unnamed former senior officer was quoted by the report as saying.
And on accusations in Alexis Jay's report that staff in the organisation were too "politically correct" to deal with child abuse allegations relating to Asian men in the town, a current senior officer said: "They couldn’t be further from politically correct.They were bullies, they were sexist.”
However, other members of staff did claim that the council "overcompensated" in its efforts not to be seen as racist.
“We weren’t allowed to hold forums near pubs because it might upset the Muslimpeople," a former officer told inspectors. "Muslim colleagues thought this was silly…”
Louise Casey report into Rotherham Council accused staff of failing to try as hard as possible to find documents relating to abuse.
Some "missing" children's case files belonging to Risky Business, a local youth project, were found to be held in its main offices all along, the report said.
It said from 'key players meetings' highlighted as lost by Alexis Jay's previous report were also found "within weeks" despite previous claims they could not be find.
"It seems that when RMBC says things are missing and lost,that they may not have looked that hard," the report said.
Rotherham Council has been accused of going to "some lengths to cover up information and silence whistle-blowers" in an inspection report following the town's abuse scandal.
Today's report found that "the Council’s concern with its reputation leads it to cover up information which it would prefer not to be in the public domain."
It said the most high profile example of this related to a serious case review of a child who was murdered in the town in 2010, which initially featured heavy redactions until a challenge from The Times newspaper.
The Times claimed that the review - which was eventually published in a less-heavily redacted version in 2013 - had been censored to mask associated failures by staff within the council.
Rotherham Council has yet to respond to the numerous allegations contained in the report.
A government-commissioned report into Rotherham Council has accused the authority of "past and present failures" in dealing with allegations of widespread child abuse in the town.
Louise Casey's inspection report found that staff at the authority denied any responsibility after findings from a previous report by Alexis Jay, which highlighted abuse against more than 1,400 children between 1997 and 2013.
Her report said figures in the council believed "they were no worse than anyone else" and claimed the "media were out to get them".
Casey said: "This inspection revealed past and present failures to accept, understand and combat the issue of child sexual exploitation (CSE), resulting in a lack of support for victims and insufficient action against known perpetrators.
"The council's culture is unhealthy: bullying, sexism, suppression and misplaced 'political correctness' have cemented its failures. The council is currently incapable of tackling its weaknesses, without a sustained intervention."