Christine Lagarde, the head of the International Monetary Fund (IMF), has been ordered to face trial over her role in a pay-out of some 400 million euros (£291 million) to businessman Bernard Tapie according to French media.
Lagarde denies any wrongdoing and said in a statement released by adviser Marc Vanghelder that she "always acted in this affair in the interest of the state and in respect of the law".
The inquiry into French businessman Bernard Tapie has involved several of former president Nicolas Sarkozy's cabinet members, including Lagarde, who was finance minister.
France's main prosecutor recommended in September that magistrates drop their investigation into Lagarde for alleged negligence with regard to the affair.
Tapie was awarded €403 million (£321 million) in a 2008 arbitration payment under Sarkozy's presidency to settle a dispute with the now-defunct state-owned bank Credit Lyonnais over a share sale in 1993.