Ames, Iowa ? Iowa State basketball coach Larry Eustachy resigned Monday, one week after the publication of embarrassing photos of him drinking and partying with students.

Eustachy acknowledged he was an alcoholic seeking treatment Wednesday, the same day the school suspended him with pay and athletic director Bruce Van De Velde recommended he be fired.

The deal between Eustachy and Iowa State gives the coach $110,000 for the remainder of 2003 and a lump sum of $850,000 on Jan. 1, 2004.

“By resolving this situation today, we will continue to move forward in our important mission of providing students with the best education possible,” said Dr. Greg Geoffroy, university president.

Eustachy, who had said last week he would not resign, spoke briefly outside his home Monday evening, saying it was “extremely important to resolve this issue immediately for the benefit of everyone involved.”

Eustachy said he concluded over the weekend that it would be best to accept the settlement, resign and move on.

“I’m not done coaching. I will coach again,” he said.

The monetary settlement “resolves all matters,” said Steve Zumbach, the university’s attorney.

“This matter needed to be brought to a close. If allowed to continue, that damage would have been irreparable,” Zumbach said.

Zumbach said it had been one of the most divisive issues that had confronted the university during his 35-year tenure.

Larry Eustachy stands with his wife, Stacy, as he speaks to reporters following a news conference announcing his resignation as Iowa State basketball coach. Larry Eustachy stepped down Monday in Ames, Iowa, then addressed the press outside his home.

As part of the settlement, Eustachy will receive the university’s health benefits during the next year. Those benefits include coverage for treatment of alcoholism, Zumbach said.

“This decision now allows our basketball program to move forward and supports Mr. Eustachy and his family in his struggle with alcohol,” Geoffroy said.

Geoffroy said he supported Van De Velde throughout the week.

A handful of basketball players rallied on the campus in support of Eustachy, while some boosters said they were upset with Van De Velde’s recommendation.

Eustachy urged his players to stay.

“I expect my players to put any divisiveness behind them and work together to become the individuals and team I know they can be,” he said.

“As for the players that my staff and I recruited, I hope they understand Iowa State will continue its high level of commitment to the basketball program, and they will be lucky to be members of this team.”

Point guard Tim Barnes and center Andrew Skoglund said they were committed to staying with the Cyclones next season.

“This is my team. As the point guard, I’m just going to take over and get this thing back on the right track,” Barnes said.

Van De Velde said he would start the search for a new head coach immediately.

Monday was the last of five days Eustachy had to appeal Van De Velde’s decision.

Iowa State University President Greg Geoffroy announces the university has accepted the resignation of Iowa State men's basketball coach Larry Eustachy. Eustachy stepped down Monday in Ames, Iowa.

Van De Velde declined to comment on the settlement.

Eustachy spoke Monday evening with his wife, Stacy, at his side.

“President Geoffroy is not the problem. Bruce Van De Velde is not the problem,” Eustachy said. “I’ve created this situation, and I’m holding myself totally accountable, and we move on.

“I’m really looking forward to being a much better husband and a much better father,” he said.

The 47-year-old Eustachy has been Iowa State’s coach for five years and is Iowa’s highest paid state employee, receiving about $1.1 million a year.

At Iowa State, Eustachy compiled a record of 101-59, including Big 12 championships in 2000 and 2001. He was Big 12 Coach of the Year in both those seasons and was AP Coach of the Year in 2000.

Eustachy also spent three seasons as the head coach at Idaho and five at Utah State. His career record over 13 seasons is 260-145.

His news conference Wednesday was his first public appearance since the publication of photographs showing Eustachy partying at an apartment in Columbia, Mo., after Iowa State’s Jan. 21 loss.

The photos, printed in The Des Moines Register, were taken by a University of Missouri student. The photos show Eustachy holding a can of beer, kissing young women on the cheek and being kissed by them.

Students who attended the party told the newspaper that Eustachy drank beer, became belligerent with a partygoer who objected to his presence and made disparaging remarks about his team.

The future of Eustachy’s coaching staff has not been determined. Zumbach said negotiations were ongoing.

Eustachy’s top assistant, Steve Barnes, was suspended the day after his boss. Barnes was accused of telling a player and his family to help Eustachy fight for his job and to “go after the people that got us.” Barnes denied making such a remark.

Another assistant coach, Randy Brown, resigned earlier this year after he was charged with possession of child pornography.

Iowa State has not fired a coach in a major sport since football coach Jim Criner was let go in November 1986 after his program was accused of numerous NCAA rules violations.