Professor Young has held a somewhat controversial tenure, overseeing massive cost-cutting across the institution – notably at the School of Music – and more recently urging the federal government to push through with its plans to charge students more for their degrees.

He plans to return to his first love of research in maritime engineering and oceanography at the Swinburne University of Technology from 2016.

ANU chancellor Gareth Evans said that he understood and accepted Professor Young's decision and the university would shortly commence an international search for a replacement, which he hoped would be completed by mid-year in order to enable a "seamless transition" in February 2016.

Professor Young began his term in March 2011 and was previously vice-chancellor of the Swinburne University of Technology for seven years. Several of the ANU's previous vice-chancellors have left after just one term, although previous vice-chancellor Ian Chubb – now Australia's Chief Scientist – was extended for two.

At just 59 and the current holder of two Australian Research Council discovery grants, Professor Young said he was keen to pursue pure research after more than two decades in senior administration.

"By February 2016, I will have served as a vice-chancellor for 13 years in two universities, and in senior executive roles in four institutions over more than 20 years. I have found my time at ANU enormously satisfying."

He also holds the position of chairman of the Group of Eight, Australia's most elite institutions – a term which also concludes at the end of next year.

Professor Young said he would continue to keep up a busy pace this year, continuing to argue the benefits of federal university deregulation reforms in the face of considerable crossbench and community opposition.

Professor Evans said Professor Young's decision had been unexpected but that council was indebted to him and would miss him.

"Ian Young has been an outstandingly successful vice-chancellor at a time of great turmoil and uncertainty in the tertiary education sector. He has been intensely strategically focused, and totally committed to maintaining and enhancing our national university's stellar reputation in research, teaching and learning, and public policy outreach," Professor Evans said.

"I look forward to him maintaining a cracking pace in his last year with us, and he will have the full support of the university council in doing so."

He singled out Professor Young's work in attracting the $50 million Tuckwell Fellowship program to the ANU, noting astrophysicist Brian Schmidt had also won his Nobel Prize during Professor Young's tenure.

Of his return to research – Professor Young said his interests were "presently focused on the understanding of marine environmental extremes. This is a particularly important area in a time of significant climate change and I am keen to be able to devote more time to this critical issue. I plan to join the Centre for Ocean Engineering, Science and Technology at Swinburne University in a research and teaching role, and in addition return to acting as a specialist consultant."

The National Tertiary Education Union said Professor Young's term had been marred by industrial upset and a relentless focus on cost-cutting.

In 2013 he announced 230 administrative job cuts and an unspecified number of early retirements for academic staff as part of a raft of budget measures to cover a $51 million shortfall in federal government funding.

Shortly after arriving at the ANU Professor Young caused local and national outrage when he announced a $1.5 million cut to the School of Music – starting an exodus of acclaimed staff and moving the course structure away from the conservatorium model and to a more academic one.

NTEU ACT division president Jack Bowers said he would leave a mixed legacy.

"Certainly he has created greater uncertainty for staff and reduced course options for students," he said. "Obviously the School of Music was a debacle, not just for the ANU but for the Canberra community."

On the other hand, the union had welcomed the decision for the ANU to divest itself of fossil fuel shares.

"We felt that this sent a strong signal and was a welcome piece of leadership from Professor Young."

The divestment decision was, however, denounced by the federal government and industry.

Meanwhile his University of Canberra counterpart – Professor Stephen Parker - praised Professor Young's polite demeanour. The two have held diametrically opposing view on the future of the university sector in Australia with Professor Parker condemning any moves to deregulate fees.

"I'm sorry to hear that he will not be continuing. I have enjoyed his company in Canberra and I congratulate him on his achievements at ANU. He has always been polite and decent to me, even when I have been saying horrible things," Professor Parker said.

University of Melbourne vice-chancellor Glyn Davis wished him well.

"I recall his remarkable courtesy and patience in dealing with alternative views, and one striking memory was when he sat outside the steps of the ANU Chancellery on hot afternoons to speak with students directly about their concerns around the changes in higher education," Professor Davis said.