University President James F. Barker said a national search for a successor will be launched this fall.
Phillips had previously briefed Barker and the Board of Trustees about his plans.
"As I am now in the final year of my contract, I have decided to publicly announce my retirement plans, so that President Barker can have as much time and flexibility as is needed to conduct a search and ensure a smooth transition in leadership," Phillips said. "I'm very proud of what we have accomplished at Clemson, and I believe the future for the athletics program is bright."
"Clemson is a better university because of Terry Don Phillips," Barker said. "His integrity, dedication and business insights have made Clemson's athletics programs stronger financially, academically and competitively. Under his leadership, I believe Clemson has established a model athletics program -- one that is characterized by full compliance, success on the field of competition, and recognition that student-athletes are students first.I have asked Terry Don to continue as Athletic Director until we have his replacement."
Highlights of Phillips tenure include 57 top twenty-five finishes, 13 ACC championship, 77 winning seasons by teams and being bowl eligible in football every year.
During the Phillips decade, Clemson has been nationally recognized for its academic progression rates and had a record 2.99 overall grade-point-average (GPA) by student athletes for the spring semester of 2012. On average, 53 percent of Clemson student athletes have had at least a 3.0 GPA over the last 10 years. Each of the top seven overall GPA semesters have taken place in the last 10 years.
Financial stability has been a hallmark of the Phillip's era. The athletic program has invested more than $140 million in facilities, attracted and retained top coaches, built financial reserves and kept debt at a low level.In an environment where high profile college teams have faced severe NCAA compliance issues and penalties, Clemson has not received one letter of inquiry.
Phillips was recognized by the National Association of Collegiate Directors of Athletics as the 2005-06 GeneralSports Turf Systems Athletic Director-of-the-Year for the Southeast Region of the Football Bowl Series. Earlier this year, the Bleacher Report sports media website named Phillips one of the nation's top 25 athletic directors.
Barker said his goal is to have a successor named by the time Phillips' contract ends in July 2013 so that there is no need to appoint an interim director.
CLEMSON - James Barker counts the search for Terry Don Phillips' replacement among the most…