CHARLOTTESVILLE, Va. (AP) - University of Virginia President Teresa A. Sullivan, the first woman to lead U.Va., will resign in a mutual parting announced Sunday.

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Sullivan will step down Aug. 15, two years after she succeeded John Casteen, who retired after 20 years as head of the university founded in 1819 by Thomas Jefferson. She is U.Va.'s eighth president.

"It's been a great honor to serve as president of the University of Virginia," Sullivan said in a statement. "Although the board and I have a philosophical difference of opinion, I will always treasure having had the opportunity to work with so many gifted faculty and staff, talented students and loyal alumni. I am also grateful for the privilege to have worked with our extraordinary vice presidents and deans."

Rector Helen E. Dragas said the board had discussions over the past year with Sullivan about the importance of developing, articulating and acting on a clear strategic vision.

"In a rapidly changing and highly pressurized external environment in both health care and in academia," Dragas said, "we believe that the university needs to remain at the forefront of change."

The board said it would move swiftly to name an interim president and begin the search for a new leader.

Before coming to Charlottesville, Sullivan served a four-year term as provost of the University of Michigan, and prior to that held several administrative and academic positions at the University of Texas.

In an interview with reporters after her inauguration in August 2010, Sullivan said her initial priorities included examining U.Va.'s internal budgeting process to better predict funding and the university's overall revenue structure amid dwindling state funding. She also expressed concerns about retaining faculty who haven't had pay raises in several years.

"The best faculty members are free agents," she said. "We will do our best to convince them that U.Va. is the best place for them to further their careers."

Sullivan acknowledged her role as the first female president at Virginia, which didn't admit its first class of undergraduate women until 1970. Still, she said, she had the experience of being the first woman in academic positions through her career.

"I understand how it's deeply symbolic to lots of people, and I'm appreciative of that," she said.

Sullivan had a five-year contract with a compensation package not to exceed $680,000 annually.

Sullivan, who grew up in Little Rock, Ark., and Jackson, Miss., earned her undergraduate degree at Michigan State University. She earned her master's and doctorate degrees in sociology from the University of Chicago and is known as a leading scholar in labor-force demography. Before becoming Michigan's provost, Sullivan served in various administrative and teaching positions at Texas, with her most recent position there as executive vice chancellor for academic affairs from 2002-2006.

As provost, Sullivan also serves as the University of Michigan's chief budget officer.

Virginia Governor Bob McDonnell released a statement on Sullivan's impending departure, which read, in part:

"I want to thank Dr. Teresa Sullivan for her leadership of the University of Virginia over the past two years. Serving as the President of Mr. Jefferson's University is a tremendous responsibility and she has fulfilled her duties with honor, energy and good stewardship. In addition, President Sullivan has been a great partner with our Administration in our efforts to increase access and affordability at Virginia's colleges and universities. Through her leadership, Virginia added nearly 1,000 new student slots and recently enacted the lowest yearly tuition increase in over a decade. Having the University of Virginia play such a leading role in higher education reform was immensely helpful in ensuring that this work to expand access and affordability all across our higher education system would be successful and broadly embraced by all state institutions."