Future power systems with a high share of intermittent renewable energy sources (RES) in the energy portfolio will have an increasing need for active power balancing. The integration of controllable and more flexible distributed energy resources (DERs) at the distribution-grid level represents a new solution and a sustainable alternative to conventional generation units for providing balancing services to the transmission system operator (TSO). Considering that the extensive participation of DERs in ancillary services may lead to the violation of limits in the distribution network, the distribution system operator (DSO) needs to have a more active role in this process. In this paper, a framework is presented that allows the DSO, as the central coordinator of the aggregators, to participate in the balancing market (BM) as a balancing service provider (BSP). The developed mathematical model is based on the mixed-integer second-order cone programming (MISOCP) approach and allows for determination of the limits of active power flexibility at the point of the TSO−DSO connection, formation of the dependence of the price/quantity curve, and achievement of the optimal dispatch of each DER after clearing the balancing market. The simulation results are presented and verified on modified IEEE distribution networks.