Lagarde is charged with negligence in an inquiry into what is known in France as the “Tapie affair” - allegations that former politician and tycoon Bernard Tapie profited from a favourable arbitration process to pocket millions of euros in return for backing Nicolas Sarkozy in his successful bid for the presidency in 2007.
Lagarde was economy minister at the time that it was decided to arbitrate rather than go to court over Tapie’s claim that he had been fraudulently short-changed in the sale of sportswear company Adidas.
But she said she is not going to stand down, even though she was appointed to her job after Dominique Strauss-Kahn resigned because of sexual assault charges in the US.
“I’m returning to Washington to work this afternoon,” Lagarde told the AFP news agency on Wednesday morning.
“After a three-year investigation and dozens of hours of questioning, the commission acknowledged the obvious fact that I was not accomplice to any crime and so was reduced to alleging that I was not sufficiently vigilant,” she said.
The charges are “completely unfounded”, Lagarde insisted.
Five people, including Lagarde’s private secretary at the time, Stéphane Richard, who is now boss of Orange, have been charged with organised fraud.
Lagarde's fate is now in the hands of the IMF executive board.