Failing nurseries and pre-schools face closure if they do not improve rapidly, Sir Michael Wilshaw announced today.
Under a major shake-up of early years inspections those that fail to raise their game will have their registration cancelled, the Ofsted chief inspector said.
The move could affect thousands of nurseries and pre-schools currently caring for young children in England.
Sir Michael also raised fresh concerns about qualifications among those working with babies and toddlers, saying it is an "absolute nonsense" that more exams are needed to work with animals than young children.
Sir Michael announced that from September, Ofsted will only consider a rating of good or outstanding to be acceptable for nurseries and pre-schools.
The satisfactory judgment will be scrapped and replaced by "requires improvement" - a change already made to school inspections in England.
Nurseries and pre-schools which are judged to "require improvement" will face more inspections and have up to four years to raise standards.
If they are not rated "good" after two inspections they are expected to be considered "inadequate".
And "inadequate" nurseries and pre-schools that fail to improve will face having their registration cancelled, effectively closing them down.
The move comes amid concerns of the inspectorate that many pre-schoolers do not have access to good childcare.
"They will have four years to become good", Sir Michael said in a speech this morning.
"Four years is a long time in a child's life. If they haven't improved by then, they are likely to be judged inadequate and we are going to recommend closure and deregistration."
Ofsted figures show that as of the end of August last year, up to 243,400 children were being cared for by nurseries, childminders and pre-schools that were not yet considered good.
More than two fifths of early years educators were judged no better than satisfactory at their last two inspections, and over one in 10 had dropped a grade, according to the watchdog's annual report, published in November.
Ofsted says it is still considering plans for inspection of childminder agencies, and is not yet making proposals about early re-inspection of childminders.
Sir Michael said that one of the biggest problems with early years education is that too many of the workforce are under-qualified.
"We simply must get better qualified people working in the right areas in this sector," he said.
Those working with pre-school children should have at least a Level 3 qualification - equivalent to A-levels, Sir Michael suggested.
"That's something we should aim for throughout the sector, a Level 3 qualification equivalent to A-level, or a degree qualification."
He added: "We demand more in terms of qualifications from those who want to work with animals."
Would-be veterinary assistants need to have five good GCSEs, it was suggested.
"There is not that same insistence in this sector and that's an absolute nonsense," Sir Michael said.
He warned that inspectors will be tougher on poor nurseries and pre-schools in the future.
"No one thinks they should be allowed to languish in their inadequacy," he said.
"I wouldn't have wanted my child to go to an inadequate nursery and I don't believe that any other parent would either - so we're going to be less tolerant. When we go back to re-inspect an inadequate setting and it hasn't improved, it's likely that we may take steps to cancel the registration."
He added that Ofsted is examining how it can cancel the registrations of under-performing nurseries and pre-schools more swiftly.
"We have asked the Minister for legislative change which will enable us to link registration histories between closed and reopened settings so that we stop providers from easily losing a 'history' they don't want parents to know about."