MEXICO CITY (Reuters) - Mexican finance minister Jose Antonio Meade will step down on Monday, two people familiar with the matter said on Sunday, as the ruling Institutional Revolutionary Party (PRI) gears up to pick its candidate for the 2018 presidential election.

File Photo - Mexico's Finance Minister Jose Antonio Meade gives a speech during a meeting with members of the diplomatic corps in Mexico City, Mexico November 22, 2017. REUTERS/Henry Romero

One of the people, who spoke on condition of anonymity due to the sensitivity of the matter, said Meade would announce his intention to seek the presidency for the PRI when resigning.

The office of Mexican President Enrique Pena Nieto late on Sunday said it would hold an event at 10.00 a.m. local time on Monday, without specifying what it entailed. Several Mexican media said Meade would announce his resignation at 10.00 a.m.

A spokesman for Meade’s office said he was unaware of any plans for the minister to resign on Monday.

Pena Nieto is barred by law from seeking a second term, and his party faces a major challenge from twice presidential runner-up former Mexico City mayor Andres Manuel Lopez Obrador, a leftist who has led early polls for the July 2018 election.

Meade would be replaced as finance minister by Jose Antonio Gonzalez Anaya, currently head of state oil firm Pemex, one of the two people familiar with the situation said.

Meade has for months been one of the favorites to be the PRI candidate, both due to his reputation for competence as a minister across two rival administrations, and because he has avoided the taint of corruption that has battered the party.

The 48-year-old has also been a top pick to succeed the departing Agustin Carstens at the helm of the Mexican central bank. The second person said if Meade was not stepping down to run for the PRI, he would be going into that job.

Meade is not a member of the centrist PRI, which changed its statutes in August to make it easier for outsiders to run for the presidency. Officials say his reputation for honesty and cross-party appeal will be vital if he hopes to defeat Lopez Obrador.

On Thursday, the PRI announced it would begin registering presidential hopefuls on Dec. 3, and that a national convention would formally elect the candidate on Feb. 18.

Education Minister Aurelio Nuno, 39, Pena Nieto’s former chief of staff and one of his closest allies, as well as health minister Jose Narro, are the most likely alternatives to Meade if he does not seek the candidacy, senior officials say.