With an almost flawless record, it has edged ahead of neighbouring North Lanarkshire after picking up 10 very goods and one good in the HMI assessment of its education service.
Continuous improvement in performance is the only indicator that fails to win the top rating.
Inspectors say that the strong showing of Scotland's fifth largest authority is down to the clear vision and "inspirational leadership" of Maggi Allan, executive director for education, and her heads of service.
They comment: "Overall, leadership of the authority was very good. In many respects, it was outstanding."
A 70-page report published this week pays remarkable tribute to the council for its commitment to education. Senior councillors, the chief executive's office and the education service are all commended for taking tough decisions, such as pressing ahead with contentious school rationalisation plans.
A consistent refrain throughout the report is the whole-hearted support of headteachers for various aspects of the service. According to more than 90 per cent of heads, senior officers recognise and celebrate success, know their schools well and communicate clear ideas about where education is going.
Standards are steadily improving compared with similar authorities. In P1-P3, for example, attainment in reading had improved by 19 per cent, a figure that outstrips progress across the country. "The challenge for South Lanarkshire was to sustain its current levels of performance in primary schools," inspectors say.
In an unexpected compliment, given HMI's long-held criticism of progress in S1 and S2, inspectors praise secondaries for building on the excellent work of primaries. "Over the period 2000-2003, attainment in S1-S2 in reading, writing and mathematics had risen steadily and remained consistently above the national average and that of comparator authorities."
In terms of exam performance, the authority is in line with national averages. Leadership and standards in most schools are said to be very good, based on recent inspections in 32 primaries and seven secondaries.
Eddie McAvoy, the council's leader, said that South Lanarkshire had placed education at the top of its agenda and invested heavily over the past eight years. The "very clear direction" of politicians and senior officials was behind HMI's endorsement. A key theme was successful corporate working across departments.
Mr McAvoy said that the report brought welcome recognition for senior officials and teachers and their sheer professionalism and their "driving desire to see the children and young people of South Lanarkshire succeed".
Mrs Allan is singled out by inspectors for her "incisive understanding" of key priorities and her determination to consider the long-term interests of children and young people. Improvements in services had benefited children and families.
HMI describes plans to modernise schools as "a bold decision", despite the flak senior councillors and officials took last year in the run-up to the council elections. Two Independent councillors were subsequently elected on an anti-school closure ticket.
Jean McKeown, former education convener, lost her seat because of the rumpus over secondary school rationalisation.