Lloyd Axworthy will not be seeking a third term as president and vice-chancellor of the University of Winnipeg, officials have confirmed.

Axworthy informed the university's board of regents on Monday night that he will complete his current five-year term, which runs until June 2014, a spokesperson confirmed to CBC News on Tuesday afternoon.

The spokesperson said the board of regents will initiate a search committee to look for a new president, but it's business as usual in the meantime.

Before he was appointed as University of Winnipeg president in 2004, Axworthy was a Liberal MP and federal cabinet minister whose political career spanned 27 years.

During his time in the House of Commons, he served as minister of human resources development, western economic diversification, labour and foreign affairs.

Faces capital campaign, budget shortfall

As president of the downtown university, Axworthy has spearheaded the largest capital campaign in its history.

At the same time, the university has faced a $1.5-million revenue hit when the provincial government reduced its funding.

Earlier on Tuesday, Axworthy said officials have been forced to leave many administrative jobs vacant in an effort to save $3.5 million this year.

Axworthy said universities will have to stop counting on government money in order to survive.

"I think the reality is that universities can't rely on public funding to the same extent that they used to," he said.

"I mean, that's the new reality of a higher education. It's not a priority the way it once was."

No faculty jobs have been cut this year, he said, adding that the university hopes to bring in new revenue by boosting enrolment and charging a technology fee to students for services like Wi-Fi.

Still, Axworthy said it's a tough budget.

"It's not just a matter of keeping jobs open. It's also, in many cases, just reassigning responsibilities and providing, I think, a more lean but effective administration," he said.