Inspectors said the new leaders of New College, Leicester - David Kershaw and Jane Brown - had "skilfully stabilised" it. The school hit the headlines after it recorded the lowest value-added GCSE results and highest truancy rate in the country.
Bad behaviour also dogged the school, reaching a nadir in February 2005 when almost 40 teachers threatened to strike following 12 assaults by pupils the previous term.
During the inspectors' latest visit in March, they found that although education was still inadequate, the school now had the capacity to tackle its problems, allowing it to move out of special measures and into the "notice to improve" category (formerly known as "serious weaknesses").
Mr Kershaw, executive principal who took control of the school in December, said: "Our initial reaction was one of satisfaction that inspectors had identified our ability to bring about improvements.
"We are not complacent. We recognise there is a long way to go and we are addressing issues of teaching and learning, behaviour and attendance ready for inspectors' next visit within 12 months."
The school is teaming up with Leicester university to provide leadership training for heads of department, while senior staff have provided training in behaviour management.
But not all staff have adapted to change. By September, 23 of the 80 teachers who were at the school in December will have been replaced by 15 newcomers.
"We have been able to win the hearts and minds of staff by saying we can change the lives of these young people. But we are hard taskmasters. Those staff who couldn't come on board have moved on to pastures new," Mr Kershaw said.
Mr Kershaw said he hopes the proportion of pupils gaining five or more A*-C grade GCSEs will increase from 9 per cent last year to 14 or 15 per cent this summer.
But the school's long history of underachievement means he is wary of making promises. "When I arrived, parents said to me 'Mr Kershaw, you look like a nice chap but we've heard it all before'. We are developing confidence among parents but the jury is still out and I can understand that."
New College was one of 49 schools named by Ofsted as having escaped special measures last term. Of these, 13 have been given a notice to improve.
A full list of schools leaving special measures during spring term 2006 is available from www.ofsted.gov.ukpublications
Short, sharp and small
How the inspection system changed in September:
* Schools given only a few days' notice of inspectors' visits.
* Small teams visit for no more than two days.
* Self-evaluation rather than lesson observation at the centre of inspection.
* Inspections at least every three years,rather than the present five.
* Inspection reports reduced to about six pages.
* A "notice to improve" replaces the previous categories of serious weaknesses and underperforming schools.
Further changes to be introduced from September:
* The best schools to get ultra-light-touch, single-day inspections.
* Schools given notice to improve will be revisited within one year.
* Schools judged satisfactory overall but with some weaknesses can expect extramini-inspections.