Paul Wolfowitz turned in his resignation as president of the World Bank late Thursday, ending a taut and tumultuous tenure that included controversies over how he treated staff members, fought corruption, and, ultimately, managed his girlfriend.

He agreed to leave after European representatives on the bank's 24-member executive board made two concessions, one on Wolfowitz's behalf and the other in deference to the U.S.

The first involved issuing a statement in which the bank's board said that Wolfowitz "assured us that he acted ethically and in good faith in what he believed were the best interests of the institution, and we accept that."

The second involved delaying his departure from the antipoverty and development agency until the end of June, to give the U.S. time to nominate an American successor. Many European representatives had wanted Wolfowitz to leave immediately.

The Washington Post reports that a debate over Wolfowitz's performance had essentially paralyzed the World Bank for almost two months. His departure spared the board from a wrenching decision as to whether it should reprimand him or fire him after an internal investigation concluded that Wolfowitz broke the bank's ethics codes in awarding a substantial raise to his girlfriend.

Wolfowitz has argued that he raised the salary of his longtime companion, Shaha Riza, to compensate for disrupting her career at the bank by moving her to another job at the State Department. That move, he said, was intended to avoid the conflict of his being her boss.

The Post says that bank staff members described a "celebratory" mood inside the bank's headquarters near the White House. People were hugging, singing songs, and drinking champagne, the newspaper says.

The New York Times reports that Wolfowitz's departure averted a schism between the U.S. and its economic partners at the bank, which makes $22 billion in loans and grants to poor countries each year.

More important for the bank's future, the U.S. will retain the right to choose its next president. By tradition, the U.S. has named the World Bank president while European countries have selected the leader of its sister organization, the International Monetary Fund, which makes short-term loans to countries facing fiscal crises.

In its article, the Wall Street Journal (subscription required) includes a preliminary list of potential candidates to run the bank. It includes former deputy secretary of state Robert Zoellick and current deputy treasury secretary, Robert Kimmitt. Another name is that of former Senate majority leader Bill Frist, a Tennessee Republican.