Open University vice-chancellor Peter Horrocks has resigned after a vote of no-confidence in his leadership.
Resigning with immediate effect, he said the university “faces a scale of challenge that is unprecedented”. It has to save £100m and student numbers have collapsed.
Mr Horrocks had angered staff by saying academics “get away with not teaching”.
But university bosses paid tribute to Mr Horrocks, saying he had made an enormous contribution.
The academics union, the UCU, which had called for him to go, said members were pleased he had resigned.
The university is projecting an annual deficit of around £20m and has been badly affected by a collapse in the number of part-time students in England.
In his resignation statement, Mr Horrocks – who took up the post three years ago – said he was “ready to move on, having achieved my primary goals at the OU”.
He said: “The OU faces a scale of challenge that is unprecedented.
“The requirement for social justice in education is acute and the demands for new skills are ever present, which means that a great institution like ours is needed more than ever.
“I know that all members of the university will continue to commit themselves to the changes necessary to live up to these opportunities.”
Welcoming his resignation, UCU regional official Lydia Richards said: “The Open University is a fantastic institution and Horrocks’s replacement must defend the unique role it plays in our education system and the work of its staff.”
She also called for his plan to cuts staff and courses to be axed.
However, the university governing body is expected to continue the bulk of the plans he drew up on changing the university curriculum.
Mr Horrocks had previously worked at the BBC for 33 years, leaving his post as director of the BBC World Service Group in 2014.
The OU was founded in 1969 to offer higher education distance learning to students who often did not fit the traditional undergraduate mould – many were older and studying part-time while working.
There are many more students on a variety of competing distance learning courses nowadays.