Bloomington, Ind. ? Mike Davis has resigned as coach at Indiana but will stay on for the remainder of the season, a source in the IU athletic department with knowledge of Davis’ situation told SI.com on Wednesday night.

The source added that the university hoped to have a news conference in Bloomington to discuss details of Davis’ termination as early as today.

According to the source, Davis informed Indiana officials of his decision more than a week ago, and Davis’ attorney and the university subsequently negotiated the terms of his departure, which were finalized this week.

Davis spent three years as an assistant before taking over the program after Bob Knight was fired in September 2000. Davis led the Hoosiers to the NCAA championship game in 2002, where they lost to Maryland, but his support among fans and boosters plummeted as IU failed to qualifty for the NCAAs the last two years.

Following Wednesday night’s 71-68 loss at Penn State, Davis’ record at Indiana was 109-76. Indiana (13-9, 5-6 in the Big Ten) had lost six of its last seven games to drop to seventh place in the conference, putting the Hoosiers’ NCAA Tournament hopes in jeopardy.

During a Big Ten conference call with the media on Monday, Davis said he thought Indiana fans would be happier “with one of their own,” meaning someone who played for the Hoosiers. Iowa coach Steve Alford is rumored to be Davis’ likely replacement.