International Monetary Fund (IMF) Executive Board said Tuesday that it will initiate promptly the process of selecting the next managing director, after Christine Lagarde announced her resignation from the IMF position with effect from Sept. 12, 2019.

Lagarde was nominated for the presidency of the European Central Bank (ECB) two weeks ago, 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 said.

"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," it 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.

Earlier this year, David Malpass, former undersecretary for international affairs at the U.S. Treasury Department, was chosen by U.S. President Donald Trump as a candidate to lead the World Bank Group, and he took office in April after a campaign without competition.

The Wall Street Journal (WSJ) reported that Lagarde has stepped down at "an opportune moment," because the finance ministers of the Group of Seven (G7) economies are meeting in France on Wednesday and Thursday for a summit, which could lead to an agreement on a candidate to succeed her as the head of the IMF.

The G7 comprises Britain, Canada, France, Germany, Italy, Japan and the United States, and its meetings also include representatives from the European Commission. The managing director is selected by the IMF's 24-member executive board, which is dominated by advanced economies.

Bank of England Governor Mark Carney, former Dutch Finance Minister Jeroen Dijsselbloem are among the potential candidates for the position. Kristalina Georgieva, the Bulgarian chief executive of the World Bank, as well as Margrethe Vestager, the Danish EU competition commissioner, are also under consideration, the Financial Times reported earlier.

Emerging markets, however, might also propose candidates, with their growing share in the world economy. Mexican Agustin Carstens, chief of the Bank for International Settlements, former Reserve Bank of India Governor Raghuram Rajan, Monetary Authority of Singapore Chairman Minister Tharman Shanmugaratnam and Credit Suisse Group AG Chief Executive Officer Tidjane Thiam, among others, could be nominated, Bloomberg reported earlier.

David Lipton, first deputy managing director of the IMF, has served as acting managing director of the multilateral lender following Lagarde's ECB 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.