The NCAA in 2005 deemed the buckskin-clad Illiniwek an offensive use of American Indian imagery and barred the university from hosting postseason events.
American Indian groups and others complained for years that the mascot, used since 1926, is demeaning. Supporters of the mascot say it honors the contributions of American Indians to Illinois.
Illinois still will be able to use the name Illini because it's short for Illinois and the school can use the term Fighting Illini, because it's considered a reference to the team's competitive spirit, school officials said. It is unclear if the school will get a new mascot.
"This is an extremely emotional day for people on both sides of the issue, but the decision announced today ends a two-decade-long struggle surrounding Chief Illiniwek on this campus," said athletic director Ron Guenther.
"Personally, as an alumnus and former athlete, I am disappointed. However, as an administrator, I understand the decision that had to be made."
School officials said they received a letter from the NCAA on Thursday that said the school will no longer be banned from hosting postseason events if it drops the mascot and related American Indian imagery. The NCAA's sanctions thus far have prevented Illinois from hosting postseason events in two low-profile sports.
"The Chief Illiniwek tradition inspired and thrilled members of the University of Illinois community for 80 years," board of trustees chairman Lawrence Eppley said Friday. "It was created, carried on and enjoyed by people with great respect for tradition, and we appreciate their dedication and commitment. It will be important now to ensure the accurate recounting and safekeeping of the tradition as an integral part of the history of the university."
On Friday, a Champaign County Circuit Court judge rejected two students' request for a court order banning the university from "capitulating to the NCAA by announcing the retirement of Chief Illiniwek."