Horst Koehler, who for four years has headed the Washington-based International Monetary Fund, Thursday resigned to accept the nomination to be president of Germany.
At a hastily arranged news conference at IMF headquarters, Mr. Koehler announced his decision.
"I want to tell you that I'm deeply honored to be nominated for the office of federal president of Germany," he said. "I have accepted this nomination today. And according to the rules of the IMF, I have to resign immediately with the acceptance of this nomination. So I resigned today."
Mr. Koehler will be succeeded temporarily by his American deputy, university economist Anne Krueger.
Analysts say that Mr. Koehler probably could not resist the honor of becoming the government's nominee for state president, even though the position is largely ceremonial.
The 61-year-old Mr. Koehler succeeded Michel Camdessus as IMF managing director in May 2000. The German government waged a tenacious effort to secure Mr. Koehler's selection. His resignation is certain to touch off a fierce but gentlemanly succession struggle. By tradition, the 184-member nation IMF is headed by a European while its sister institution, the much larger but less powerful World Bank, is headed by an American.
At his farewell news conference, Mr. Koehler said he takes pride that the IMF became what he termed "a better listener" under his leadership.
When asked what unfinished business he is leaving behind, Mr. Koehler mentioned the financial problems facing Argentina. But he said he is cautiously optimistic that the South American country will regain economic health and that, despite halting debt repayments, it will reestablish good relations with foreign commercial banks.