Struggling schools face the database crunch
From September 2007, their performance will be graded from A to F on student progress, overall test scores, parental feedback and on-site inspections, with "chronically" low-scoring schools facing possible closure.
The centrepiece of the $25 million (pound;12.5m) scheme, announced last month, is a database that will crunch exam results and other information on the city's 1.1 million students, pinpointing schools' weaknesses.
Schools will be measured against others serving similar proportions of low-income, non-English speakers and special needs pupils, and will gain extra credit for results with low-achieving students.
Norman Fruchter, education professor at New York university, said: "I don't know of any other US (education authorities) using such a combination of indicators."
Annual student progress - tracking individual test scores through their school career - will carry the most weight. James Liebman, New York City education department's chief accountability officer, said: "We want schools to add value, take kids at the level they come at, and accelerate their learning."
Existing US accountability schemes, including the Bush administration's No Child Left Behind (NCLB) Act - which applies to schools across America as well as local initiatives such as New York's - typically capture annual test scores for certain age groups, meaning different students are measured each year.
But the "growth model" adopted by New York is gaining ground as an alternative. This year, 10 states will pilot the approach to see if it is compatible with NCLB's goal of getting all US students performing at the level expected of their age by 2014.
New York schools will also be measured on average overall test scores.
Parental, staff and student satisfaction surveys, attendance rate, disciplinary record and degree of community engagement will also go towards schools' grades.
Professor Liebman said schools receiving chronically low grades will face "changes in leadership, restructuring or closure". High-scoring schools will receive extra cash.