The Nebraska Democrat had led the school for nine years after serving in the senate for two terms.
Kerrey recently agreed to become executive chairman of the San Francisco-based Minerva Institute for Research and Scholarship.
The New York Times reports (http://nyti.ms/YrtHYF ) that Kerrey initially planned to stay on at the New School and felt he could do both jobs at once, but the school announced he had resigned Friday.
The university had been paying him $602,000 per year. He will remain a consultant to the school through the end of the academic year.
Information from: The New York Times, http://www.nytimes.com