Lagarde on Tuesday announced that she formally submitted her resignation from the IMF position with effect from September 12, 2019, Xinhua reported.
Two weeks ago, Lagarde was nominated for the presidency of the European Central Bank (ECB), as part of the European Union (EU) leaders' agreement on the future leadership of top EU institutions. She then decided to temporarily step down from the IMF leadership during the nomination period.
"With greater clarity now on the process for my nomination as ECB President and the time it will take, I have made this decision in the best interest of the Fund, as it will expedite the selection process for my successor," Lagarde said in a statement released Tuesday.
"Today the IMF Executive Board accepted Managing Director Christine Lagarde's resignation from the Fund with effect from September 12, 2019," the Executive Board said in a statement.
"We would like to express our greatest appreciation for all that Managing Director Lagarde has done for the institution. Her legacy of achievements has made a lasting imprint on the Fund."
"Under her guidance, the Fund successfully helped its members navigate a complex and unprecedented set of challenges, including the impact of the global financial crisis and its aftershocks," the statement continued.
"With this decision by Managing Director Lagarde, the IMF Executive Board will initiate promptly the process of selecting the next Managing Director and will communicate in a timely fashion," the Executive Board said.
The position of IMF chief has always been held by Europeans while the head of the World Bank has traditionally been American, an informal arrangement that has stayed in place for over seven decades.
David Lipton, first Deputy Managing Director of the IMF, has served as Acting Managing Director of the multilateral lender following Lagarde's nomination. The Executive Board said it has the "utmost confidence" in Lipton, who remains acting managing director in the interim period.
"I know that the Fund is in the best possible hands under his stewardship until a successor has been elected," Lagarde wrote in her resignation letter. "I will offer the Acting Managing Director any help that he so requests for appropriate transition purposes."
Lagarde, a 63-year-old French national, would be the first woman to lead the ECB. She is set to replace Mario Draghi, whose eight-year term ends on Oct. 31.
"I look forward to the prospect of returning to Europe, where I will dedicate myself to my new mission at the European Central Bank, which, not unlike the IMF, highly values intellectual excellence, integrity of research and analysis, independence, and a high commitment to public service," Lagarde said.
On July 5, 2011, Lagarde became the 11th managing director of the IMF, and the first woman to hold this 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 )