In a televised address on Tuesday morning, Thabane said the time for him to retire “from a major theater action, taking time off from a public office” had arrived.
The official resignation came after 80-year-old Thabane repeatedly said that he would retire.
Neither the Prime Minister and his wife have spoken publicly about the allegations, but for months the kingdom of the small mountain has been confused by the scandal.
“When I made a voluntary announcement in January this year to retire from office on or before July 31, I did it wholeheartedly because of my full confidence and conviction that for everything, there is a season; a time to be born and a time to die, a time to plant and there is time to take what is planted, “he said, quoting the scriptures.
He will be replaced by his finance minister Moeketsi Majoro who will be appointed on Wednesday.