Apparently, that was the odor of machination.
"Mr. Wolfowitz will not resign under this cloud and he will rather put this matter to a full (board) vote than to capitulate on his integrity," his lawyer Robert Bennett told Reuters.UPDATE (5/17, 7:43pm):
No, sorry it was the redolence of bullshit. From the WaPo:
...in agreeing to leave, Wolfowitz extracted a significant measure of exoneration -- his key demand in the negotiations. Sources said the board will soon issue a statement ascribing to the bank some of the blame for the ethics controversy while acknowledging that Wolfowitz believes he acted ethically.
"He assured us that he acted ethically and in good faith in what he believed were the best interests of the institution," the statement will read, according to a person familiar with the draft wording. "We accept that."
In other words, he's resigning because he has done nothing wrong.