"I am honoured to have been nominated for the Presidency of the European Central Bank," Xinhua news agency quoted Lagarde as saying.
"In light of this, and in consultation with the Ethics Committee of the IMF Executive Board, I have decided to temporarily relinquish my responsibilities as Managing Director of the IMF during the nomination period," she added.
Lagarde, a French national, would be the first woman to lead the ECB. She is set to replace Mario Draghi, whose eight-year term ends on October 31.
Lagarde's nomination is part of the European Union (EU) leaders' agreement on the future leadership of EU institutions, which also includes proposing Ursula von der Leyen, the female German defense minister, to be the next European Commission President.
"Christine Lagarde will, with her international background and standing as current Managing Director of the International Monetary Fund, be a perfect President of the European Central Bank," European Council President Donald Tusk said in a news conference.
On July 5, 2011, Lagarde became the 11th managing director of the IMF, and the first woman to hold that position. She was elected to a second five-year term as the IMF managing director, which started on July 5, 2016. Prior to joining the IMF, Lagarde served as France's finance minister from 2007 to 2011.
( With inputs from IANS )