Mr Caller had announced his decision on Tuesday morning with immediate effect, council leader John Cotton said, and thanked him for his valuable contribution in helping Birmingham’s progress.
“My message to the public is that changes in personnel will not change the core mission or allow a change of direction that puts at risk any of the progress we have made over the last two years,” he said.
McMahon said Birmingham’s recovery remained “fragile” but “marked progress” had been made under Caller’s leadership.
That included developing a stable medium-term financial plan, making progress towards resolving the outstanding equal pay situation, and re-implementing the Oracle IT programme.
The minister stated the government’s priority was to ensure this work continued, and it was confident this would be the case under Tony McArdle.
The letter confirming Mr McArdle’s appointment as lead commissioner, external highlights the fact the council is in the “midst of a dispute in its waste services” and has a “demanding improvement journey ahead.”