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WASHINGTON - Trying to put a controversy behind it, the Bush administration was wasting no time finding a successor to World Bank President Paul Wolfowitz, who will resign over his handling of a pay package for his girlfriend.

World Bank President Paul Wolfowitz reacts during a closing news conference at the final day of the International Monetary Fund and World Bank spring meeting in Washington April 15, 2007. [Reuters]

Wolfowitz on Thursday announced that he would step down at the end of June, his leadership undermined by a furor over the compensation he arranged in 2005 for Shaha Riza, a bank employee.

His departure ends a two-year run at the development bank that was marked by controversy from the start, given his previous role as a major architect of the Iraq war when he served as the No. 2 official at the Pentagon.

It also ends a potential political headache for President Bush, who had named Wolfowitz to the post.

The Wolfowitz flap had been seen as a growing liability that threatened to tarnish the poverty-fighting institution's reputation and hobble its ability to persuade countries around the world to contribute billions of dollars to provide financial assistance to poor nations.

The bank "needs to rebuild it credibility immediately, regain its focus and devote its full attention to its clients," said the bank's staff association, which, along with former bank officials, aid groups and some Democratic politicians, had wanted Wolfowitz to resign.

The White House said it would move quickly to name a new candidate to run the bank.

Bush "will have a candidate to announce soon, allowing for an orderly transition that will have the World Bank refocused on its mission," White House spokesman Tony Fratto said.

Bush's selection must be approved by the World Bank's board.

Among those mentioned as a possible replacement for Wolfowitz were former Deputy Secretary of State Robert Zoellick, who was Bush's former trade chief; Robert Kimmitt, the No. 2 at the Treasury Department; Treasury Secretary Henry Paulson; former Rep. Jim Leach, R-Iowa; Sen. Richard Lugar, R-Ind., and Stanley Fischer, who once worked at the International Monetary Fund and is now with the Bank of Israel.

A White House official wouldn't comment on possible candidates, saying "any reporting on potential names is pure speculation."

The 185-nation bank, created in 1945 to rebuild Europe after World War II, provides more than $20 billion a year for projects such as building dams and roads, bolstering education and fighting disease. The bank's centerpiece program offers interest-free loans to the poorest countries.

By tradition, the bank has been run by an American. The Bush administration keenly wanted to keep that decades-old practice intact as it dealt with the Wolfowitz situation. The United States is the bank's largest shareholder and its biggest financial contributor.

Paulson, who will work with the president on finding a successor to Wolfowitz, said, "I will consult my colleagues around the world as we search for a leader." That suggested a more consultive approach to finding a new head of the bank.

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