Christine Lagarde will leave the International Monetary Fund in September, as her nomination to lead Europe's central bank gathers pace.
In a statement, Ms Lagarde said she had made the decision to quit in order to hasten the appointment of her successor as managing director of the fund.
It comes following her nomination to succeed Mario Draghi as president of the European Central Bank on 2 July.
"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," she said.
Ms Lagarde's nomination triggered the temporary handover of her duties to David Lipton, who is acting as managing director of the IMF.
This arrangement will continue while the fund's executive board selects a new head.
Ms Lagarde's resignation takes effect from 12 September.
The IMF's executive board said: "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."