In a letter to Holyrood's Health and Sport Committee, Health Secretary Jeane Freeman has announced the escalation of NHS Greater Glasgow and Clyde (NHSGGC) to stage four of the NHS Board Performance Framework.
In Scotland, a five-stage scale is used to show the level of oversight for stricken health boards.
Following the revelations about infections suffered by patients at the Queen Elizabeth University Hospital (QEUH), which have been reportedly caused by contaminated water, NHS Greater Glasgow and Clyde now joins NHS Tayside and Highland at stage four.
Two wards at the Royal Children's Hospital (RCH) on the £800 million campus were closed more than a year ago for work to be carried out.
In her letter, Ms Freeman said: "The intention of the escalation would ensure appropriate governance is in place to increase public confidence and strengthen current approaches that are in place to mitigate avoidable harms."
The letter also announced the establishment of an "oversight board", chaired by Chief Nursing Officer Professor Fiona McQueen.
Specific support will also be offered for infection prevention and control, communications and engagement.
The mother of 10-year-old Milly Main, who died at the RCH in 2017, has said she is "100%" certain her death was due to contaminated water.
Kimberly Darroch said she was still looking for answers as to what happened to her daughter.
Victoria Freeman, whose son Mason Djemat died at the hospital aged three, has also railed against the lack of information coming out of the health board.
It has been reported police investigated Mason's death, which took place in the same month as Milly's.
Ms Freeman said she received no response from the health board and was also unhappy with the actions of the Health Secretary.
She told the BBC: "I don't think that Mason was acknowledged, particularly by her, and I feel that she did not take Mason's death seriously."
A whistle-blower from the hospital came forward earlier this month, telling Labour MSP Anas Sarwar there had been 26 cases of infection, with Milly being among those hit.
Scottish Labour health spokeswoman Monica Lennon said the measure puts the future of the board's leadership in doubt.
"This is a long overdue intervention in a health board which has lost the confidence and trust of families long ago," she said.
"It shouldn't have taken parents and staff whistle-blowers speaking out to force the Government into taking special measures.
"The Scottish Government must now confirm whether they are happy for the chief executive and the current leadership team to continue in their roles."
She added: "The chief executive is managing a board which has badly let down many families and this cannot be allowed to continue."
The Health Secretary has called a public inquiry to be held into the issues at the QEUH and delays to the new Royal Hospital for Sick Children in Edinburgh.
She has told the Scottish Parliament she hopes to have appointed a chairperson to the role by Christmas.
Mr Sarwar welcomed the measures, saying: "Jeane Freeman has taken the correct course of action.
"The Glasgow health board is not fit for purpose, and this is a necessary step following the unforgiveable failings of senior management.