President Nicos Anastasiades has accepted Sarris's resignation. The minister has faced strong criticism for his handling of the Cyprus's negotiations with its international creditors.
Sarris, who had headed the country's now defunct Laiki Bank last year in a bid to save it from collapse, told reporters he decided to step down to ease the investigation ordered earlier Tuesday.
Sarris, 66, was appointed finance minister after Anastasiades' conservatives won general elections in February, days before the island was overwhelmed by its financial crisis.
Anastasiades acknowledged accepting the finance minister's resignation, adding that "Mr Sarris', decision to submit his resignation, for reasons of political responsibility in order to ease the work of the Investigating Committee, constitutes an example of a new mindset in Cypriot political life."
Earlier Tuesday, Anastasiades appointed a panel of three former supreme court judges to investigate the country's plunge to the verge of bankruptcy.
He said that ordinary citizens who are shouldering the burden of "actions and omissions" by officials want to see those responsible punished.
Cyprus has been given a €10 billion bailout by its European partners and the International Monetary Fund, after its bloated banking sector threatened to destroy the economy. To secure the bailout, Cyprus had to agree to an overhaul of its banking sector, with bondholders, investors and savers in the country's two biggest banks taking a hit. Laiki, the country's second-largest bank, will be broken up with depositors with more than €100,000 taking major losses. Meanwhile the government confirmed at the weekend that savers with more than €100,000 at the Bank of Cyprus could face losses of up to 60 per cent on their savings as part of the rescue deal.
Anastasiades urged the judges to kick off their probe by investigating his family's business dealings amid an accusation in an opposition newspaper that a company that is said to be co-owned by one of his relatives took money out of Laiki, days before the country agreed to its international rescue.
The new Finance Minister will be former Labor Minister Harris Georgiades, with Commerce Ministry Permanent Secretary Zeta Emilianidou stepping into the labour role.Suggest a correction