Nuclease required for the repair of DNA interstrand cross-links (ICL) recruited at sites of DNA damage by monoubiquitinated FANCD2. Specifically involved in repair of ICL-induced DNA breaks by being required for efficient homologous recombination, probably in the resolution of homologous recombination intermediates. Not involved in DNA double-strand breaks resection. Acts as a 5'-3' exonuclease that anchors at a cut end of DNA and cleaves DNA successively at every third nucleotide, allowing to excise an ICL from one strand through flanking incisions. Probably keeps excising with 3'-flap annealing until it reaches and unhooks the ICL. Acts at sites that have a 5'-terminal phosphate anchor at a nick or a 1- or 2-nucleotide flap and is augmented by a 3' flap. Also has endonuclease activity toward 5'-flaps. Hydrolytically removes 5'-nucleotides successively from the 3'-hydroxy termini of 3'-hydroxy-terminated oligonucleotides. Binds 2 magnesium or manganese ions per subunit. Interacts with FANCD2 (when monoubiquitinated). Interacts with FANCI, MLH1, MLH3 and PMS2. Localizes at sites of DNA damage following recruitment by monoubiquitinated FANCD2. Localizes to stalled replication forks via its UBZ4-type zinc finger. The UBZ4-type zinc finger specifically binds monoubiquitinated FANCD2. The KEN box and D-box are required for interaction with FZR1/CDH1 and essential for APC(CDH1)-mediated ubiquitination. Ubiquitinated and degraded during mitotic exit by the APC/C-Cdh1 complex. Belongs to the FAN1 family. Extended N-terminus.