(CNN) President Donald Trump's personal charitable foundation has agreed to dissolve under judicial supervision amid an ongoing lawsuit concerning its finances, according to a document filed Tuesday in Manhattan Supreme Court by the New York state Attorney General's office.
The dissolution of the Donald J. Trump Foundation resolves one element of the attorney general's civil lawsuit against the foundation, which includes claims that the President and his three eldest children -- Don Jr., Ivanka and Eric -- violated campaign-finance laws and abused its tax-exempt status. Rather than operating it as a genuine charity, the lawsuit alleges, they instead allowed it to be used "as little more than a checkbook to serve Mr. Trump's business and political interests."
The agreement to dissolve, signed by both an attorney for the foundation and Attorney General Barbara Underwood's office, also allows the attorney general's office to review the recipients of the charity's assets. The foundation's most recent tax return listed its net assets at slightly more than $1.7 million.
The closure of Trump's nonprofit comes amid an escalation in the litany of criminal and other investigations touching almost every corner of Trump's business and political operations, including his presidential campaign, his inauguration committee and his family real estate business.
The lawsuit against the charity is one of two cases in which the President himself is accused of wrongdoing after federal prosecutors said in court filings earlier this month that Trump directed his former attorney, Michael Cohen, to make or orchestrate payments during the 2016 election to silence women who claimed sexual encounters with Trump. Trump has denied those claims.
The agreement filed Tuesday won't end the state's lawsuit against Trump's charity, which also seeks two other outcomes: $2.8 million in restitution, plus penalties, and a ban on Trump and his children serving on the board of any other New York nonprofit.
The office had objected to the charity's prior attempts to disband before the New York lawsuit was filed, saying it couldn't shut down while under investigation. Tuesday's agreement largely reflects a victory for the attorney general's office, including a requirement that the parties must jointly submit to the court a list of nonprofits that will receive the charity's remaining funds.
Underwood said Tuesday that the agreement "accomplishes a key piece of the relief sought in our lawsuit earlier this year."
"This is an important victory for the rule of law, making clear that there is one set of rules for everyone," she 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."
An attorney for the charity, Alan Futerfas, called the attorney general's statement "misleading," saying the foundation had been seeking to dissolve since Trump's election in 2016.
"Unfortunately, the NYAG sought to prevent dissolution for almost two years, thereby depriving those most in need of nearly $1.7 million," Futerfas said.
He added that the foundation had distributed millions over the past decade, including "$8.25 million of the President's personal money," though The Washington Post and others have reported that Trump contributed little of his own wealth to the nonprofit after 2006. "The NYAG's inaccurate statement of this morning is a further attempt to politicize this matter," Futerfas said.
In response, a spokeswoman for the attorney general's office, Amy Spitalnick, said the charity had been attempting to "dissolve without any oversight or accountability."
During a White House briefing Tuesday, press secretary Sarah Sanders declined to comment on the agreement concerning the charity.
The suit, filed in June, alleges that Trump and his children violated federal and state charities law with a "persistent" pattern of conduct that included unlawful coordination with the 2016 Trump presidential campaign.
Central to the lawsuit is a nationally televised charity fundraiser for military veterans that Trump held in Des Moines, Iowa, on January 28, 2016, just ahead of the Republican caucus vote there. The foundation received $2.8 million as a result of that event. According to the New York suit, Trump campaign staff then directed the disbursement of those funds for Trump's political benefit.
The lawsuit also alleges that Trump mined his charity for "personal enrichment," including using $100,000 from the nonprofit to settle legal claims against his Mar-a-Lago resort in Palm Beach, Florida.
The judge overseeing the lawsuit must approve the stipulation in order for it to go into effect. The agreement comes after a November ruling by Justice Saliann Scarpulla that allowed the lawsuit to move forward, denying a motion by the foundation to dismiss the case.
As the lawsuit progresses into the new year, however, Underwood won't be overseeing it. The attorney general's office is set to change leadership in January, with Letitia James replacing Underwood as the state's top law-enforcement official. James has vowed to pursue violations of state law by Trump and those connected to him, including continuing the case against his charity.