Eurozone finance ministers were widely expected to pick their Spanish peer for the top job, the first of a series of changes at the ECB over the coming two years, including the post of the chief of the bank currently held by Italian Mario Draghi.
"I will be withdrawing Philip's name and I have spoken to Minister De Guindos and wished him the best of luck this evening," Irish Finance Minister Paschal Donohoe said as he arrived for talks to fill the post with his
The ministers "will make a decision tonight that will be in the best interest of the functioning and success of the European Central Bank," he added.
The choice comes despite the scepticism of senior European lawmakers who said they preferred Lane, who is not a politician, over his rival after an informal hearing last week.
EU leaders will ultimately choose the successor to Portugal's Vitor Constancio, whose eight-year mandate expires in May, as the ECB's number two.
That decision will be taken on March 22 at an EU summit after consultations with the European Parliament and the ECB's Governing Council.
De Guindos, a veteran of eurozone economic policy, said this month he was "convinced" he will have enough support to clinch the post after Madrid officially nominated him for the job.
De Guindos defended his candidacy, saying he was the longest-serving member of the Eurogroup, which groups eurozone finance ministers.
He has served as economy minister since Prime Minister Mariano Rajoy's conservative government came to power in 2011.
As economy minister he oversaw the clean-up of Spain's banking industry that collapsed after a housing boom imploded during the worst of the eurozone debt crisis.
In exchange Spain had to impose tough austerity measures to reduce the county's public deficit.
Before entering the government, De Guindos led the Iberian unit of Lehman Brothers between 2006 and 2008 before the investment bank collapsed.