SAN FRANCISCO — The chancellor of the University of California, Berkeley will step down at the end of the year as head of the world-renowned campus after extending his planned tenure to deal with steep cuts in state funding.

Chancellor Robert Birgeneau, 69, originally hoped to serve for seven years but decided to stay longer because of the extraordinary challenges posed to the campus by "the most extreme disinvestment by the state in UC's history," he said in a statement Tuesday.

Birgeneau, a distinguished physicist, plans to remain at the university to teach and conduct research after he leaves office on Dec. 31.

Since Birgeneau became chancellor in September 2004, UC Berkeley has bolstered its status as one of the world's leading research universities despite a sharp decline in state support caused by California's financial crisis.

In recent years, the campus has been the scene of rowdy student protests over budget cuts and tuition hikes. Birgeneau and other school administrators were criticized for a violent police crackdown on students who tried to set up an Occupy camp on campus last fall. An investigation into the confrontation is ongoing.

During his tenure, the school has sharply increased its research funding and private fundraising while expanding its financial aid program for students from low- and middle-income families.

"Although challenges still remain, I am confident that we have put into place a clear pathway for the years ahead and strategies that will support Berkeley's ongoing excellence and its impact on the world," Birgeneau wrote in his letter to campus

Birgeneau, 69, became the ninth chancellor of the 144-year-old Berkeley campus after serving as president of the University of Toronto and science school dean at the Massachusetts Institute of Technology, where he spent 25 years on the faculty.

Birgeneau "has aimed high in his efforts to make UC Berkeley a truly global force in higher education and research, but he also has managed to preserve its historic standing in California as a beacon of hope and opportunity for all prospective students," University of California system President Mark Yudof said.

Yudof, who heads the 10-campus system, said a committee will conduct a nationwide search for a new chancellor of the 36,000-student campus.

Birgeneau, a native of Toronto, said after returning to the faculty he hopes to "have one more truly significant physics/materials science experiment still to come in my academic career."