Christine Lagarde's resignation came two weeks after her nomination on July 2 for the ECB's top job. She did not immediately quit the IMF because of uncertainty over whether the new European Parliament would support her and other new EU leadership positions, sources told Reuters.
The IMF in its statement said it accepted Christine Lagarde decision to temporarily step aside and named IMF First Deputy Managing Director David Lipton as the fund's acting chief, expressing its "full confidence" in the American economist.
Lagarde, once France's first woman finance minister and since 2011 head of the International Monetary Fund (IMF), is a strong advocate of female empowerment, although she has no direct, active monetary policy experience. The biggest task for Lagarde, who had previously denied any interest in an EU job, will be to revive the euro zone economy.
Earlier on Wednesday, the IMF said current and threatened US-China tariffs could cut 2020 global gross domestic product by 0.5%, or about $455 billion -- a loss larger than G20 member South Africa's annual economic output.
Formally launching the IMF and World Bank annual meetings on the Indonesian resort island of Bali, Lagarde urged countries to "de-escalate" trade conflicts and fix global trading rules instead of abandoning them.
French judges on Monday found IMF chief Christine Lagarde guilty of negligence for failing to challenge a 400 million euro ($417 million) state arbitration payout to a business tycoon in 2008 when she was French finance minister.