RALEIGH – The N.C. State Board of Trustees fired former first lady Mary Easley, just hours after the university announced Chancellor James Oblinger's resignation after continued controversy over her hiring.

Easley still had four years left on a five-year, $850,000 contract to lead a public safety center and a high-profile speaker series.

"We have got to do everything we can to bring sunlight to this issue. I have therefore fully supported the Board of Trustees recommendation that we terminate our relationship with Mrs. Easley," UNC System President Erskine Bowles said at a press conference Monday.

Bowles said he is not sure how much it will cost the university to terminate Easley's contract.

Oblinger's resignation is effective immediately and comes after continued criticism over the university’s hiring of former first lady Mary Easley. Provost Larry Nielsen resigned last month, citing stress from the controversy. NCSU Board of Trustees Chair McQueen Campbell also resigned.

Federal investigators have subpoenaed documents relating to Easley's hiring. But in a statement Monday, Oblinger denied wrongdoing on the part of the university.

"The hiring of Mary Easley and her treatment as a university employee involved no impropriety and no coercion," he said in the statement. "I am absolutely confident that when this chapter of N.C. State's history is written, the only conclusion drawn will be that the University and all of its officials acted both correctly and honorably."

Oblinger explained that his decision to leave was the right choice.

"I am doing so because that is what leaders do when the institutions they lead come under distracting and undue public scrutiny," Oblinger said in the statement. "This is particularly true for leaders of public institutions like N.C. State."

Oblinger has worked for NCSU for 23 years, serving as associate dean, dean and provost. He will be granted a six-month leave, paying his current salary, and will return to teaching as a professor of food science.

N.C. State Board of Trustees Chair Bob Jordan said losing Oblinger would be a blow to the university. He said Oblinger could have served longer if he hadn't gotten caught up in the scandal.

"This isn't about Mary Easley. This isn't about N.C. State. This is about trying to get to the governor, and it's not fair to come in and nitpick little stuff," Jordan said.

UNC Charlotte Chancellor emeritus Jim Woodward will take over as interim chancellor. Woodward, an aeronautical and mechanical engineer, taught at N.C. State early in his career. He served as chancellor of UNCC from 1989 to 2005 and as dean of engineering at the University of Alabama at Birmingham.

The university will now launch a search for a new permanent chancellor.

Student Government Vice President Jason Lindsay said Oblinger's decision was a best for the university.

"We're ready to move forward. We think it was a good decision on his part. I think his statement was very enlightening, how he said he'd apply the same standards to himself that he would apply to Mrs. Easley – what's best for the university, whether any wrongdoing was committed," student government Vice President Jason Lindsay said. "Right now, the huge clouds have been sitting on top of N.C. State for several weeks now, several months almost, but we're ready to move forward."

(Watch video: students' reactions to Oblinger's resignation.)

In a statement, Gov. Bev Perdue said Oblinger's resignation was "appropriate" and would help the university focus on its educational mission.

"Recent events have become a distraction from the core mission of N.C. State faculty, staff, and students," Perdue said. "I'm confident in Chancellor Emeritus Woodward's ability to lead the University on an interim basis and to maintain its focus on excellence in education and innovation."

Former governor involved in wife's hiring

E-mails released by the university Monday show former Gov. Mike Easley and his aide had a direct hand in Nielsen's hiring of the former first lady. (Watch video.)

The earliest e-mail, sent April 25, 2005, from political science department head Jim Svara to Mike Easley aide Dan Gerlach, referenced a previous discussion about possible teaching positions with the university. Svara suggested Mary Easley could teach individual courses as an assistant professor for the "normal salary" of $4,000 per course.

"I suspect that this matter falls into the miscellaneous category in your job description," Svara wrote to Gerlach.

Gerlach responded, asking Svara for something "closer to regular faculty status." He later forwarded that information onto Campbell.

"I asked Jim to keep this between me and him, which is why people up the food chain don't know about the conversation," Gerlach wrote.

Campbell then sent the information to Oblinger, who also asked about him how partial Mary Easley was to a contract position.

"My question to her is money related in that they (in poly sci) are very much into the pay-by-the-course mode vs. contract. Any sense as to the importance of a contract to the first lady?" Oblinger wrote. "I recall you using that word this morning along with a salary figure."

Campbell responded.

"I think that is more what he had in mind to try and get her at least where she is now," he said. "I can speak more in person later to explain."

From there, Oblinger made calls to deans in both the humanities and management, who were interested in having her on staff. On April 29, he wrote that he was ready to turn the matter over to Nielsen, who was then serving as interim provost.

"We're ready to move on this; next step is in the Mansion, I think," Oblinger wrote.

At that point, Campbell was still speaking with then-Gov. Easley about the position.

"The Gov called me back today and Mary is interested and would like to meet with you as soon as possible," Campbell wrote to Oblinger.

In correspondence with Nielsen, Campbell indicated that the first family was enthusiastic about the job.

"The meeting obviously went well and I chatted with the Gov late last week and he says she's very excited about it and he said if we take this seriously, which I assured him we were, this could really be a great program for everyone involved," Campbell said.

Nielsen hired Easley in late May to direct a new seminar series to bring in high-profile speakers and teach courses in the humanities and management. Nielsen became permanent provost June 27.

Severance pay violates policy

Controversy also ignited recently over Nielsen’s pay following his resignation.

Oblinger had said Nielsen would keep receiving his provost pay for six months to fulfill part of his contract, but newly-released documents indicate a deal was struck the day before Nielsen resigned.

According to the letter dated the day before his resignation, Nielsen would be paid $298,700 from July 1 to the remainder of the year. From Jan. 1, 2010 to June 30, 2011, that would scale back to $251,372.

During fiscal year 2011-2012, Nielsen's salary would be $204,043, and then during the 2012-2013 fiscal year, his salary would drop to $156,715, which is a professor-level salary.

The severance package is both longer and includes more money that what was included in his original contract. Nielsen is set to get more than $300,000 above his faculty salary and the terms are set over three years, a violation of university policy.