NICOSIA (AFP) ― Cyprus’s new finance minister was due to be sworn in Wednesday following his predecessor’s resignation hours after a probe was launched into how the island was pushed to the verge of bankruptcy.

Haris Georgiades, a 40-year-old economist who had been serving as labor minister, will formally take up his new post a day after Michalis Sarris said he was stepping down to cooperate with judges investigating the failure of Laiki Bank, where he was chairman for much of last year.

The bank’s collapse was a major contributor to the island’s near financial meltdown and need for a crippling eurozone bailout. President Nicos Anastasiades said Tuesday he had accepted Sarris’s resignation with “sadness” and lauded his “high political ethos” for stepping down.

Sarris said he believed stepping down was “the right thing” to do to facilitate the investigators’ work.

His departure came as the government wrapped up talks with international lenders that will open the way for Cyprus to receive a 10-billion-euro bailout, said government spokesman Christos Stylianides. “Today we have completed the forming of the memorandum, which is a precondition for the loan agreement,” with the period to implement the deal extended by two years to 2018 to “ease pressure on the economy,” he said.

It “should have taken place a lot sooner, under more favorable political and financial circumstances,” he said, but added: “Even with this delay, the situation is now normalizing, stabilizing and the conditions to restart the economy are created.”

Cyprus is already in recession, and as he resigned Sarris said that “2013 will be a very difficult year, and the beginning of 2014 will also be difficult. Beyond this I believe the prospects are positive.”