"The reform was too brutal. It created mistrust rather than confidence," political scientist Leif Lewin, who led a government inquiry into the matter, told reporters as he presented his findings on Monday.
"The thesis is that the operation failed – municipal control (of schools) was a failure," he added, explaining that decentralization became too unwieldy.
"Neither the municipalities, the principals, nor the teachers were up to the task. Academic results declined, as did equality and teachers' attitudes."
Lewin, who in August 2012 was tasked with reviewing the effect decentralizing control of schools had on performance, placed blame for the failure on both political blocs.
"Regardless of who's in charge, the state's job is to support teachers' professional development," he said.
In the early 1990s, Sweden effectively moved control of the country's schools away from the central state and into the hands of the municipal governments. The decision came under a Social Democrat-led government in a 1989 Riksdag vote which included the support of the Left Party.
But ever since 2008, Swedish teachers unions have been advocating for the state to resume a more central role in running the country's schools.
The issue was recently catapulted to the forefront of Swedish debate after Sweden's results in the OECD's latest Pisa study, which compares academic performance across different countries, took an unprecedented slide.
Education Minister Jan Björklund of the Liberal Party (Folkpartiet) has been an advocate of renationalizing Sweden's schools. At the Monday press conference where Lewin presented his findings, Björklund emphasized that the inquiry was not meant to come up with concrete solutions.
"The Pisa results show that we are in need of further reforms," he said, adding that a number of reforms are already under way that he hoped would reverse recent trends and put Sweden back in the global top ten when it comes to education.
The nature of the reforms will be presented later in the spring, he said.
Prime Minister Fredrik Reinfeldt remains sceptical that renationalizing schools will solve current problems.
Meanwhile, Social Democrat education policy spokesman Ibrahim Baylan blamed the government for the current state of Sweden's schools.
"There are a lot of different things that affect how effective schools are, not least of which is a government that has prioritized things other than schools for the last eight years," he told the TT news agency.