CHAPEL HILL, N.C. -- At the beginning of his State of the University address, an emotional Chancellor James Moeser announced he is stepping down.

"I shall relinquish the position of chancellor of this great university at the end of the fiscal year, June 30, 2008," Moeser said.

Moeser came to UNC Chapel Hill from the University of Nebraska at Lincoln and brought with him some changes. Among them are the Carolina Covenant, which is a program that allows students from low-income families to attend the university and graduate debt-free, and the Carolina First campaign, which is a $2.2 billion fundraising effort.

"Part of me never wants to stop doing what I'm doing because I love it, but there's also a sense there's a time to relinquish, and I think this is a good time," Moeser explained.

He took over the post in August 2000, when he replaced Interim Chancellor William McCoy. He plans to leave on June 30, 2008, making him the longest-serving chancellor since 1988.

According to UNC System President Erskine Bowles, the search for Moeser's replacement is already underway. Bowles hopes to have a permanent replacement in place by the time Moeser leaves. He says Moeser leaves big shoes to fill.

“I think when we look back on this chapter’s time at Chapel Hill, you will see a man who drove us from good to great,” Bowles said.

Roger Perry, who is the newly elected chair of the University Board of Trustees, said, “We have to maintain at the top with our top leadership role [and find a replacement who will bring] the same kind of excellence and quality that Chancellor Moeser has brought to the job."

Moeser says he is not retiring; he is just leaving the chancellor's position. He plans to return to UNCCH as a professor after taking a year off. Upon hearing that news, the crowd that gathered to hear the address gave Moeser a standing ovation.