Bank of America Corp.’s plan to repay the entire $45 billion it received in taxpayer bailouts clears a path for the bank’s next chief executive, improves the outlook for the bank’s stock, and gives retiring CEO Ken Lewis a boost as he departs, analysts say.

BofA surprised the financial markets late Wednesday when it announced it had gained government approval to repay the $45 billion it received from the Troubled Asset Relief Program. The U.S. Treasury designed the program to prop up struggling banks last year. Most analysts expected BofA to repay the money in several installments continuing into 2010.

The full repayment frees BofA from some of the government’s toughest pay restrictions and related oversight. And it also helps the bank put recent nagging issues to bed.

First, a New CEO

For weeks, the bank has reportedly been spurned by several candidates to replace Lewis because of the government’s strict oversight, possibly causing the bank to miss a self-imposed Thanksgiving target date for filling the post. Much of the cloud associated with being one of seven companies receiving “exceptional assistance” from the government will be lifted once taxpayers are repaid.

“This is a clear sign from the government that it recognizes TARP is an impediment to Bank of America finding a new CEO,” says UNC Charlotte finance professor Tony Plath. “To me, it shows the bank has a candidate, but needed the government to butt out before it could proceed.”

He expects the repayment decision will be followed by a CEO announcement in the next few days. BofA officials have maintained a decision will be made “in the near future.”

The payment also provides a signature moment for one of the bank’s leading internal candidates, chief risk officer Greg Curl.

Curl reportedly spent two weeks in Washington negotiating the repayment plan. He has long been one of the bank’s top dealmakers and is thought to be Lewis’ personal choice to take the bank’s helm.

Many believed his ties to negotiating BofA’s purchases of Merrill Lynch & Co. and Countrywide Financial Corp. would harm his chances to succeed Lewis. But Curl now may have gained favor with investors and directors for the ahead-of-schedule repayment plan.

“I don’t think this does as much for the CEO search as everyone else does, because BofA is already such a plum job, even with TARP,” says analyst Jefferson Harralson of Keefe Bruyette & Woods. “But it does raise the visibility of Greg Curl because he brokered the deal.”