This means that for the first time the Office for Standards in Education will be accountable to an external adjudicator over the conduct of its inspections. Plans for an appeals mechanism were outlined in the White Paper, Excellence in Schools.
The arbitration will act as a last resort for schools which are still unhappy after complaining to the lead inspector, the inspection company, and OFSTED.
Details of the reforms have been circulated to teacher associations and consultation ended this week.
The adjudicator will act as an "impartial referee". He or she will also be able to decide whether there has been maladministration on OFSTED's part, assess the conduct of its staff, the conduct of the inspection, the quality of advice given to the school, and "the way officials exercise discretion". But the adjudicator will not be able to order a new investigation into the complaint from scratch.
Geoff Holman, National Association of Head Teachers assistant secretary, said he thought the reform would lead to an increase in the number of complaints because schools would now see some point in protesting. "We get several phone calls every week from schools dissatisfied with inspections, some serious, some minor. But often they realise nothing will happen if they do make a complaint, so they drop it."
He said the NAHT had been "pushing OFSTED very hard" for a better appeals procedure. While the union welcomed news of an arbitrator, he said schools still needed some form of redress.
"If it is clear that something went wrong, schools should have the right to know what was done about it. It does not inspire confidence if they suspect the same inspector is free to inspect other schools." He said the NAHT also wanted to see more opportunity for schools to challenge inspectors while the reports are still at draft stage.
OFSTED will announce how the adjudicator is to be appointed on Tuesday. An OFSTED spokesman said the adjudicator would not necessarily need an education background as they would be looking at issues of conduct rather than technical educational judgments.