The Central Bank has officially confirmed Edward Scicluna will step aside from the organisation until court proceedings come to a close.

In a statement published on Wednesday afternoon, the bank said that he would "step aside from the exercise of his function, in order to devote more time to defend his innocence which he reaffirms".

It said the move was "for a temporary period, until the outcome of the court proceedings."

Scicluna will be replaced by Alexander Demarco, the bank’s deputy governor as of tomorrow. This situation will remain in place “until the outcome of court proceedings”, the bank said.

Scicluna’s decision, and his temporary replacement by Demarco, have already been communicated to Christine Lagarde, the European Central Bank president, the bank added.

The statement brings an end to a protracted impasse between Scicluna and the government, with Scicluna saying that he was prepared to resort to European courts had he been sacked by Cabinet.

The stalemate was eventually resolved during a lengthy Cabinet meeting on Tuesday during which an agreement for Scicluna to step aside by mutual consent was devised.

Scicluna, whose term as Central Bank governor will end in December 2025, will retain his full pay throughout his hiatus.

The former finance minister faces charges of fraud and misappropriation in relation to the Vitals hospitals case.

Last week, a court ruled there was enough evidence for him and former health minister Chris Fearne to stand trial.

The key reason for the decision was their failure to object to cabinet decisions on a controversial hospitals deal, which handed three hospitals to Vitals Global Healthcare and Steward and was later declared fraudulent.