ORONO, Maine — Robert Kennedy announced his decision to step down as University of Maine president during one of the toughest financial periods for the institution in recent memory.

Yet Kennedy feels the move, which was made official Wednesday, will allow him to focus more on the financial situation at the state’s flagship public university.

“I’m sure there will be those who connect my decision to that and wonder how it plays out,” Kennedy said Wednesday morning during an interview in his office. “But if anything, I think it plays out in a favorable way in the long term for the university. We’ve got severe financial challenges in the university and the state, and in a way I think this announcement will allow me to make the best decisions that are needed. In a way, it frees me up to focus on the things that are truly the most important.”

Kennedy, 62, is resigning the presidency after five years but will continue to work within the University of Maine System on projects related to federal funding for research into alternative energy and sustainability issues. In particular, he is helping to develop an energy curriculum for use at all seven campuses in the system.

He will continue as president until June 2011, after which he will continue to live in the area and be based on the Orono campus. His wife, Mary Rumpho Kennedy, will continue as a UMaine biochemistry professor.

Kennedy’s current contract expires on June 30, 2011. All presidents have rolling two-year contracts that are renewable each July.

University of Maine System Chancellor Richard L. Pattenaude said Wednesday afternoon that a national search will be announced in early September.

“[The timing] gives us ample time to pursue what will be a competitive search,” he said. “It will be hard to replace Bob. He’s worked hard. He cares deeply about the University of Maine. He’s moved it forward rather significantly in his tenure.”

The system could hire a consultant to assist with the search, Pattenaude added.

As mandated by system guidelines, the search committee will be composed of three board members, one of whom will serve as a chairperson, three faculty members, one undergraduate student with voting privileges, an alternate undergraduate student, one graduate student, one academic administrator, one member of the professional staff, one member of the classified staff, a member of the board of visitors, and an alumnus or general community member to be appointed by the chancellor.

Pattenaude said it was too early to determine the qualities the next president should have. Kennedy said the next hire should understand the workings of a school similar to UMaine.

“Out of [the national search] I’m sure will come a very good person to lead this institution,” he said.

Kennedy arrived at UMaine in 2000, serving as executive vice president and provost until 2004. He was named interim president that year when then-UM President Peter Hoff resigned. Kennedy was named president in 2005.

He has presided during turbulent financial times — the system announced last winter it was facing a nearly $50 million shortfall over the next four years — and Kennedy announced in September 2009 he was forming a committee to look at cutting up to $28 million from UMaine’s academic affairs department’s base budget.

That committee, the Academic Program Prioritization Working Group, known as APPWG, is due to make a public progress report next week.

With the announcement of his resignation out of the way, Kennedy said, he’ll be able to make tough decisions when it comes to the university’s financial future.

“I don’t think I’ll need to worry about the political consequences quite as much, and I really can focus on what’s most important,” he said. “What’s most important for this university is focusing on the near- and long-term future and making the right decisions for the future of the university. I think in a way my transition positions me in a good way to be able to do that.”

Kennedy’s current salary is $210,405, which according to statistics from the Chronicle of Higher Education was the second-lowest salary of the nation’s public land-grant universities. Along with other administrators in the University of Maine System, Kennedy also took several mandated furlough days last year.

Kennedy acknowledged his salary might not seem attractive to a candidate, but said there are other benefits to the UMaine presidency.

“It is what it is, and I’m sure that’s something the trustees and the chancellor will be looking at,” Kennedy said. “But it also reflects Maine and the values of the work ethic here. Whether that will change or not, I don’t know. The reward certainly doesn’t come from the challenges, but from the success of working with the incredible students and the people here. It’s not the financial reward, but it’s the great honor and privilege to lead this institution.”

The trustees will look “cautiously” at the president’s salary, Pattenaude said, and will do an assessment of how the salary will stand up in the market.

Kennedy’s contract had an addendum that went into effect Jan. 1, 2007. It provided for a lump sum bonus payment of $174,057 in 2012, if he remained in his position at that time, subject to review by the chancellor. The bonus was to have come in the form of some money raised by the University of Maine Foundation, and not from taxpayer or tuition funds, UMaine spokesman Joe Carr said last year.

Kennedy will be eligible for a prorated bonus of approximately $136,000, UMaine System spokeswoman Peggy Markson said Wednesday afternoon, should Pattenaude find, upon review in 2011, that Kennedy has satisfactorily met performance goals for that year.

Kennedy said he isn’t quite ready yet to reflect on his tenure, considering he has nearly 1½ years left in the position, but he said he believes UMaine has moved forward.

“There’s been tremendous momentum, and it’s critically important that we focus on things that can maintain that as much as possible,” he said.

A Minnesota native, Kennedy held administrative roles at Texas A&M University, University of Maryland, the National Science Foundation, The Ohio State University, and Washington State University before coming to UMaine in 2000.

Kennedy graduated from the University of Minnesota, Twin Cities, in 1968. After service in the U.S. Army, he earned a doctorate in botany from the University of California, Berkeley.

He began his teaching and research career in 1974 at the University of Iowa and is now a UMaine faculty member in the area of biological sciences.

Kennedy’s new position of leading the development of an energy curriculum is part of a charge of the chancellor’s “New Challenges, New Directions” plan, which calls for the creation of a systemwide program on alternative energy education and research.

A work plan for the curriculum is due in May with implementation set for September.

“Under [Kennedy’s] leadership the University of Maine has made significant gains in [research of] energy, alternative energy, sustainable energy, and so on,” Pattenaude said. “We’d like to continue to use those talents. … We really see this as an important growth area and direction for the University of Maine.”

Kennedy said he will not be teaching.

Carr said last year that Robert Kennedy is the first active UM president to be inducted into the Stillwater Society, which recognizes donors who have given at least $25,000 to the university. The Kennedys were honored in 2007.

Kennedy also has overseen private fundraising of more than $100 million since he took over as president, Carr added.

In February 2009, Kennedy was one of two finalists for a position as president of Kansas State University, but was not hired.

The UMaine System recently completed its hiring process for the president position at UMaine-Fort Kent when the board of trustees voted Monday to hire Wilson G. Hess, former Unity College president.