Decision comes after lawsuit by New York attorney general claimed Trump misused foundation to advance his 2016 campaign.

US President Donald Trump’s namesake charitable foundation has agreed to dissolve under court supervision following a lawsuit by New York’s attorney general claiming Trump misused the foundation to advance his 2016 presidential campaign and his businesses, the attorney general said on Tuesday.

New York Attorney General Barbara Underwood, a Democrat, said the Donald J Trump Foundation’s assets will be distributed to charities vetted by her office. The deal is subject to approval by a New York state judge.

Underwood sued Trump and his adult children Donald Jr, Eric and Ivanka on June 14, after a 21-month probe that she said uncovered “extensive unlawful political coordination” between the foundation and Trump’s campaign. That lawsuit will continue, with Underwood seeking $2.8m in restitution and a 10-year ban on Trump and his three eldest children running any charities.

“This is an important victory for the rule of law, making clear that there is one set of rules for everyone,” Underwood said in a statement. “We’ll continue to move our suit forward to ensure that the Trump Foundation and its directors are held to account for their clear and repeated violations of state and federal law.”

Tuesday’s decision came less than a month after Justice Saliann Scarpulla of the New York State Supreme Court in Manhattan rejected Trump’s motion to dismiss Underwood’s lawsuit.

The motion had argued that the US Constitution immunised Trump from Underwood’s claims alleging breach of fiduciary duty, improper self-dealing and misuse of assets belonging to the Foundation.

180615062427456

Trump had long pledged to dissolve the foundation and donate its remaining funds to charity, but his lawyers said they were thwarted by the attorney general’s office, which wanted oversight of the process. Foundation officials first announced their intention to shut down more than a year ago.

The White House and a lawyer for the foundation could not immediately be reached for comment on Tuesday’s announcement. Trump, a Republican, has previously said on Twitter that Underwood’s lawsuit was a concoction by “sleazy New York Democrats”.