Uruguayan diplomat Carlos Perez del Castillo, who was contesting the job of WTO director-general with Lamy, said he would ask his government to withdraw his candidacy after he came second in a final round of polling.
"I have asked that my candidacy be withdrawn," he said after being told by a special selection panel that Lamy had stronger
backing among the WTO's 148 member states.
"He got more support," Perez del Castillo said.
The recommendation of the three-person panel, led by Kenya's ambassador Amina Mohamed, will be announced to trade ambassadors at 1500 GMT. But a formal decision on whether to give the job to Lamy will only be taken on 26 May.
In Brussels, the European Commission confirmed Lamy had won.
"We understand that following this last round of votes Pascal Lamy emerged as a clear front-runner. We welcome this," trade spokeswoman Claude Veron-Reville said.
Panitchpakdi is set to step down
at the end of August
The WTO, which was deeply split last time it had to choose a new chief, is anxious to avoid another confrontation, because it fears this could further delay progress in its Doha Round of free trade negotiations.
Although, theoretically, some states could attempt to block a consensus decision to support Lamy at the council meeting in two weeks' time, diplomats said this was unlikely.
WTO chiefs, who serve for four years, have little direct power, but much potential influence.
The current director-general, Supachai Panitchpakdi of Thailand, will step down at the end of August.
One of Lamy's first tasks will be to help guide the WTO to success at its next ministerial conference in Hong Kong in December.
"We understand that following this last round of votes Pascal Lamy emerged as a clear frontrunner.
We welcome this"
European Commission trade spokeswoman
The conference is due to approve a draft deal on lowering barriers to trade, opening the way for the Doha Round to be wrapped up in 2006.
A lean-framed, 58-year-old socialist and former French civil servant, who lists jogging, tennis and cycling as his hobbies, Lamy sprang on to the global diplomatic scene in September 1999 when he became trade commissioner for the European Union.
Developing countries' support
He played an important role at the WTO ministerial meeting in Qatar in 2001, which launched the trade round, helping to win suspicious developing countries by promising that the EU would put its controversial farming subsidies on the table, if other countries were ready to make reciprocal gestures.
Lamy, who was strongly backed by the EU, sealed his victory by winning support of some of the WTO's poorest members - the Africa, Caribbean and Pacific (ACP) group - with his call while at the EU for them to benefit from the round without having to "pay" by lowering their own trade barriers.
But he is regarded with suspicion by many of the world's leading farm-goods-exporting countries, notably in Latin America, because of what they regard as the EU's protectionism.