Hennessy, a computer scientist who was Stanford's engineering school dean and campus provost before being inaugurated as president in October 2000, said that it was time to return to teaching and research.
"Maintaining and improving this university is the work of many people, and I am deeply appreciative of the dedication of so many colleagues to Stanford and its students," Hennessy told the campus faculty Senate, according to a university announcement.
Under Hennessy's presidency, the Palo Alto campus continued to build its already large endowment, which totaled $21 billion last year, and garnered $928 million in cash donations in 2014, topped only by Harvard.
With those resources and its investments in Silicon Valley through inventions by faculty and students, Stanford has been able to expand interdisciplinary research in bioengineering, bioscience, energy and computer science and sweeten financial aid so that families with incomes up to $125,000 a year won't pay any tuition for undergraduate students.
Stanford has become the most difficult school in the nation for freshman applicants. This spring it accepted only 5.05% of the 42,487 applicants, a percentage rate slightly lower than Harvard's.
Steven A. Denning, chairman of Stanford's Board of Trustees, described Hennessy's presidency in a statement as "a remarkable run, one of the greatest not only in Stanford's history but also in the annals of American higher education."
The Stanford Board of Trustees will appoint a committee this summer, to be headed by former board Chairman Isaac Stein, to search for a replacement. One obvious candidate was taken out of the running Thursday when Hennessy said that Stanford's provost John Etchemendy would not be a candidate for the presidency but would stay on in his current position for up to one year with the next president.
Hennessy earned a bachelor's degree at Villanova University and a doctorate at the State University of New York at Stony Brook. He joined the Stanford faculty in 1977 and rose up the ranks, succeeding Gerhard Casper, a German-born constitutional scholar, as president.
Despite its powerful international cache, Stanford is a relatively small school, with about 7,000 undergraduates and 9,100 graduate students.