James C. Moeser, chancellor of the University of North Carolina’s flagship campus, in Chapel Hill, announced today that he would step down at the end of the academic year.

Mr. Moeser, who is 68 and has led Chapel Hill since 2000, said his decision to relinquish his job on June 30, 2008, did not signal his retirement. After taking a year of leave to conduct research, he said, he will return to the university as a professor of music.

During Mr. Moeser’s tenure, the university agreed to replace loans with grants for needy students under its Carolina Covenant plan. The move, announced in 2003, made Chapel Hill the first public university in the country to follow an aid strategy that several elite private institutions, including Harvard and Princeton Universities, had previously adopted.

Mr. Moeser also decided, in 2002, to abandon early-admissions decisions. Later that year, he defended the university’s controversial choice to make a book about the Koran required reading for incoming freshmen and transfer students. —Sara Hebel