Inaki Urdangarin, 43, a commoner who became the duke of Palma after his 1997 marriage, has agreed to step aside during an investigation of the Noos Institute he presided over from 2004 to 2006, Think Spain reported Tuesday.
The non-profit foundation is accused of channeling millions of dollars of public funds into private companies.
Lawyer Elisa de la Nuez said the story is typical.
"Public bodies hand over large sums of money with virtually no control to the foundation presided over by Mr. Urdangarin on the basis of his personal and family connections," de la Nuez said.
The head of King Carlos' household, Rafael Spottorno, said Undangarin's behavior "has not been exemplary."