Sullivan informed the business school faculty and staff of his resignation Tuesday after making his final decision to accept a position at the University of California-San Diego on Saturday.
Julie Collins, senior associate dean of the business school, will serve as interim dean upon Sullivan's departure.
During his five years as dean, Sullivan carried the business school into the realm of national recognition.
Provost Robert Shelton said national rankings soared under Sullivan's leadership. U.S. News & World Report recently ranked the business school's undergraduate program fifth nationally.
Sullivan, however, said he could not miss the opportunity to create from scratch San Diego's new Graduate School of Management, beginning Jan. 1.
"It's a unique time to rethink what a graduate business school should be," Sullivan said. "I like to innovate and create new things."
Sullivan pushed for imaginative plans to further the business school's standing during his tenure at UNC.
In hopes of furthering international relations, Sullivan supported the development of a Kenan-Flagler satellite branch in Qatar, a country in the Middle East. Chancellor James Moeser opted to abandon the plan in February after disagreements with Qatari officials.
The recent success, national ranking and positive momentum of the business school were factors that Sullivan said helped him make his decision.