After dramatically opting to stay with the No. 2 Ducks a little more than a week ago, the enigmatic Kelly changed his mind and decided to take an NFL job as head coach of the Philadelphia Eagles.
Kelly informed Oregon of his plans on Wednesday morning, shortly before the Eagles made it official.
Following Oregon's victory over Kansas State in the Fiesta Bowl, Kelly flirted with three NFL teams: Philadelphia, Cleveland and Buffalo. But after a wild weekend of interviews amid rumors and speculation, Kelly told the Ducks he was staying put.
Ducks athletic director Rob Mullens told reporters at the time that he was obviously "ecstatic" about Kelly's decision, but Kelly himself never said anything publicly.
Mullens was not available for immediate comment but scheduled a news conference Wednesday afternoon to discuss Kelly's decision and plans for the future. The school issued a statement from him on its website.
"I have great respect for Chip, consider him a friend and wish him the best of luck in the NFL. Oregon Athletics has executed two successful head coach transitions in the past eighteen years and each time we continued our ascent. We are focused on identifying a leader who is the right fit to guide Oregon Football," the statement said.
A person close to the team who spoke on the condition of anonymity because Oregon had not yet formally announced Kelly's departure told The Associated Press early Wednesday that offensive coordinator Mark Helfrich was still considered the "frontrunner." Under Oregon state law, the school must also interview at least one qualified minority candidate for the job.
Kelly is 46-7 in four years as head coach at Oregon. The Ducks have been to four straight BCS bowl games - including a bid for the national championship against Auburn in 2011 - and have won three Pac-12 championships.
He originally came to the Ducks in 2007 as offensive coordinator under Mike Bellotti. Before that, he was offensive coordinator at New Hampshire, where he started devising the innovative hurry-up offense the Ducks are known for today.
Oregon finished last season 12-1. The team was ranked No. 1 and appeared headed for another shot at the national championship until a 17-14 overtime loss to Stanford on Nov. 17. The Ducks wound up No. 2 in the final AP poll after the Fiesta Bowl victory.
The Ducks will likely move forward with hiring a coach quickly, because signing day for football recruits is on Feb. 6.
Shortly after the move was announced, several potential recruits went to Twitter to express their surprise, including Nico Falah, an offensive tackle from Bellflower, Calif., who wrote: "Chip Kelly left?!?! He was at my house 2 days ago."
Oregon's new coach also will have to deal with possible fallout from an NCAA investigation into the school's use of recruiting services.
The inquiry is the result of reports that surfaced in 2011 concerning payments Oregon made to two such services, including a $25,000 check sent to Willie Lyles and Houston-based Complete Scouting Services in 2010. Lyles had a relationship with a player who committed to Oregon.
Oregon had requested a summary disposition in the case and presented a report to the NCAA infractions committee outlining violations the school believed occurred and appropriate sanctions. But last month Yahoo Sports reported that Oregon is headed toward a hearing with the committee because the two sides couldn't reach an agreement.
The NCAA does not comment on ongoing investigations. The hearing could come as early as this spring.
On the field, the Ducks appear sound. The team will return two of its most dynamic players next season: redshirt freshman quarterback Marcus Mariota, and speedy sophomore running back De'Anthony Thomas, who ran for a 94-yard touchdown on the opening kickoff of the Fiesta Bowl.
Helfrich, 38, has been Oregon's offensive coordinator and quarterback coach for the past four seasons under Kelly. The affable Oregon native came to the Ducks after two seasons as offensive coordinator at Colorado.
Mullens said last week that two schools had already approached Oregon with interest in Helfrich for head coaching vacancies.