Cyprus announced late on Monday that it had requested assistance from its eurozone partners, becoming the fifth out the 17 countries that share the euro to seek a rescue.
"The government of the Republic of Cyprus has today informed the appropriate European authorities of its decision to submit to euro area member states a request for financial assistance," read a statement released by the Cyprus government.
The statement did not specify a figure for the requested aid although local media speculated it would be in the region of five billion euros ($6.4 billion).
Neither did it state whether it was seeking a government bailout or funds to recapitalise its banks, but the statement said the request for help was a consequence of a Greek debt write-down that hurt its financial institutions.
The Cyprus government has always insisted the only financial help they need was to help the relatively large banking system recapitalise against a worsening of the euro crisis.
A European Union diplomat said last week that Cyprus would first ask Russia for a loan of up to 5.0 billion euros, having already secured a 2.5-billion-euro low-interest loan from Moscow to cover its refinancing needs for this year.
Cyprus thereby follows Greece, Ireland, Portugal and Spain in formally asking for help from the eurozone.
The Cypriot government said that a write-down of Greek bonds which hit its banks hard pushed it to seek help.
"The purpose of the required assistance is to contain the risks to the Cypriot economy, notably those arising from the negative spillover effects on its financial sector, due to its large exposure to the Greek economy," the statement added.
Cyprus could also seek a foreign loan from either Russia or China to cover its debt refinancing needs for 2013.
The Cypriot request was confirmed just hours after Spain formally requested a banking rescue. Both requests were looking to the European Financial Stability Facility and/or the European Stability Mechanism for help.
No figures were made public by Madrid either, but eurozone governments had already agreed to place at Spain's disposal up to 100 billion euros ($125 billion) in loans.
The news comes as Cyprus readies to take on the European Union's six-month rotating presidency on July 1.
Fitch Ratings had earlier in the day downgraded Cyprus's sovereign ratings, with the rescue request having been widely anticipated for weeks.
Fitch said the downgrade was "principally due to Greek corporate and households exposures of the largest three banks -- Bank of Cyprus, Cyprus Popular Bank and Hellenic Bank."
The credit rating agency said the Cypriot banks will require capital injections of potentially up to 4.0 billion euros ($5.0 billion) -- 24 percent of the island's gross domestic product -- in addition to the 1.8 billion euros already earmarked for Cyprus Popular Bank.
Greece has been forced to seek bailouts twice from the EU and the International Monetary Fund, first for 110 billion euros in 2010 and then for 130 billion euros earlier this year. It has also had a 107-billion-euro private debt write-off.
Portugal agreed to reforms and austerity measures in May 2011 in exchange for a 78-billion-euro package.
Ireland was forced to ask the IMF and EU for an 85-billion-euro bailout in November 2010.
Cyprus President Demetris Christofias has called for an emergency meeting of party leaders on Tuesday to discuss the state of the recession-hit local economy.
He had been reluctant to seek an EU bailout fearing the consequences would be harsher austerity measures imposed by Brussels.
Cyprus is very protective of its low corporate tax rate of 10 percent which helps to attract much needed foreign investment.
Neither the government nor its commercial banks have been able to borrow from international money markets since June last year due to the island's debt being reduced to junk status by two of three international credit agencies.
Monday's downgrade by Fitch only compounded an already precarious situation.