"I have concluded that it is in the best interests of those whom this institution serves for that mission to be carried forward under new leadership," Wolfowitz said in a statement after three days of deliberations by the World Bank board.
Wolfowitz violated bank rules in arranging a generous promotion and pay package for Riza shortly after he assumed the bank presidency in June 2005, according to an internal World Bank report made public Monday.
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Riza ended up earning almost 200,000 dollars a year when she was transferred to the State Department while still on the Bank's payroll.
The report also said the bank gave Wolfowitz vague instructions on how to resolve the possible conflict of interest over Riza.
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Wolfowitz said in his statement that he "acted ethically and in good faith" in what he believed "were the bes