"Ours is a great institution with its brilliant and hard-working faculty and staff, and its smart and ambitious students, and I plan to continue to contribute to ensuring the bright future of the University of Illinois," Herman wrote. "Thank you for the honor to serve the University. I have enjoyed every minute, in fact, every nanosecond."
According to the university, the 68-year-old Herman will remain with the central Illinois school to teach. His resignation is effective Monday.
The Faculty Senate last month called for Herman and university President B. Joseph White to step down amid the admissions scandal. White has announced he will leave his post in December.
Board chairman Christopher Kennedy said Tuesday that he talked to Herman a number of times since joining the board in August and that the discussions included the possibility of Herman resigning.
Kennedy said Herman's replacement will have to have a strong focus on attracting good faculty and on science and research, much like Herman, who is a mathematician by training.
"The more you talk about Richard, the more impressive he is," Kennedy said. "It'll be a challenge to find somebody."
The board's executive committee will meet Friday to act on Herman's resignation and new employment contract. Herman's duties will be split between Stanley Ikenberry, who will become interim president when White leaves, and interim Provost Robert Easter.
In e-mails released by the university and in news reports since May, it became clear that Herman played a key role in what the university called its Category I list -- a list of student with political connections whose applications for places at the flagship Urbana-Champaign campus were closely tracked. Some of those applicants were admitted over more qualified ones.
In some e-mails, Herman pushed for the admission of underqualified applicants to the university's law school and agreed to provide scholarship money in exchange.
Herman has apologized for his role in the scandal, which also led to the resignation of seven members of the board of trustees.
Gov. Pat Quinn, who created a commission to examine the admissions troubles at the university, said Tuesday it was best that Herman resigned.
"I think the episode certainly didn't help the university in any way," he said.
Herman came to the university as provost in 1998 and was named interim chancellor in 2004 before being given the job permanently in 2005. He previously was dean of the College of Computer, Mathematical and Physical Sciences at the University of Maryland.
He is being paid about $400,000 a year as chancellor. Details of his new contract were not immediately available. According to the university, Herman will forgo a $300,000 retention bonus that he would have received next year.