Monitor, the UK's health sector regulator, has put the Colchester Hospital University NHS Foundation Trust into special measures.
The organisation launched an inquiry into the trust after claims from the Care Quality Commission (CQC) that patient care in its cancer ward was lacking - something backed up by higher mortality rates in the unit.
Conclusions reached in the Monitor investigation left executives with no choice but to move it into special measures as a last ditch effort to improve patient care and reduce the cancer ward's high death rate.
An improvement director will now be appointed to the trust in order to ensure a turnaround takes place.
Adam Cayley, regional director of Monitor, said: "Following the urgent actions already taken to safeguard patients at the trust we have stepped in formally to assure the health and wellbeing of patients using the cancer pathway at Colchester.
"The trust has been given an explicit set of actions to improve the service it offers patients. We will be monitoring progress closely and we will not hesitate to take further regulatory action if required."
Professor Sir Mike Richards, chief inspector of hospitals across NHS England, welcomed the decision and remarked he is pleased action is being taken to turn it around.
One of the major points of concern from inspectors was the lack of leadership at Colchester Hospital, something that investigators deemed could compromise its management of pre-arranged cancer care pathways.
To allay fears that cancer death rates will remain high, Colchester Hospital University NHS Foundation Trust executives will now be forced to publish and regularly update an action plan to make sure members of public in the area know what efforts are being made to improve the situation.
The CQC has pledged to continue monitoring the hospital in order to hold both existing bosses and the new improvement director to account.
Part of this CQC drive will include unscheduled inspections and the collection of complaints from patients.By Chris Stevenson