The state takeover of the city schools is the culmination of a 10-year battle for control and comes after reports that the Newark board of education had failed to give pupils an adequate education for decades.
One report, issued just over a year ago, said that the elected board appeared more interested in enjoying the spoils of office - cars and junkets - than in tackling falling test scores, poor attendance and crumbling schools where sometimes even lavatory paper was in short supply.
Dr Peter Contini, deputy state commissioner in charge of the takeover, said: "We are confident that the performance of students in Newark will improve as a result of the intervention."
Press reports were accompanied by pictures of New Jersey education officials humping boxes into the offices of the board of education, and the former Newark schools superintendent, Eugene Campbell, driving away in his official limousine, which he had to surrender when he got home. Mr Campbell said: "I have done the best that I was able to do. I have done nothing wrong."
Outside the offices, a crowd gathered and engaged in loud argument. There were reports of emotional scenes inside, with staff hugging each other and crying.
The state officials are now working out what money is available to get everything in order by September 11 when the new school year begins. Among the priorities are repairing buildings and ordering textbooks.
Newark is the third school district to be taken over by the state. In 1989 officials took control of Jersey City schools and in 1991 they took over Paterson.
Newark is more than double the size of either of these school districts. It has 47,000 pupils, 82 schools and a budget of $540 million (Pounds 337m).
The state has chosen Dr Beverly Hall, deputy schools chancellor for instruction in New York City, to be acting superintendent for one year. She is leaving New York partly because her boss, Ramon Cortines, has resigned after repeated spats with the mayor.