Prime Minister Juri Ratas of European Union member Estonia has resigned after an inquiry into a property development project in the capital.
"Prime Minister Juri Ratas informed President Kersti Kaljulaid of his resignation," the government said in a statement on Wednesday.
Ratas, who has denied any knowledge of wrongdoing, will need to formally announce his resignation at a government session on Thursday and also notify parliament.
The president will have to propose the next leader of the government to parliament within two weeks.
News wire BNS said Ratas' party was declared suspect on Tuesday in a criminal investigation over a property development project in Tallinn.
"While there definitely are other ways to go about it, only one of them seemed to be right," Ratas told reporters, according to BNS.
He made the decision to resign after a party meeting on Tuesday to discuss the charges, which dragged into the early hours of Wednesday, BNS added.
Prosecutors allege the development was promised permission to build a road on city property, in exchange for a donation of up to 1 million euros to the party ahead of municipal elections, BNS reported.
Ratas, prime minister since late 2016, lost the 2019 general election, in which the centre-right Reform Party emerged the biggest party.
He then blocked the winner from taking power by forming a surprise coalition of his left-leaning Centre, the conservative Fatherland party and the far-right EKRE that gave the three parties a majority in parliament.
Estonia's next general election is due in March 2023.