Harvard Business School Dean Jay O. Light announced his decision to retire at the end of this school year in an e-mail sent to the community yesterday afternoon.

After leading the school through a wave of budget cuts earlier this year, Light, who joined the Business School faculty 40 years ago, said that it was a good time to step down.

“I had to take ownership of the process of making sure this institution got through what we now call the ‘Great Recession,’” Light said in an interview yesterday afternoon of the past year’s fiscal challenges. “We’re at the right place to bring in a new dean who will execute whatever set of choices we make.”

During his five-year tenure, Light oversaw the completion of a $600 million capital campaign, the complete renovation of the school’s Baker Library, and the introduction of the 2+2 Program, which allows rising seniors to apply and, if accepted, work for two years after graduation before matriculating.

But Light said he thinks he will be remembered for expanding the HBS Global Initiative, a growing international network of research centers, and spearheading initiatives to build faculty and expand the school’s curriculum in areas such as health care and social enterprise.

University President Drew G. Faust said that she plans to appoint a successor by the time Light steps down in June 2010. Faust added that she will assemble a search committee in the coming weeks.

“It was very helpful for me to call a number of leaders in the field across the nation,” Faust said of the recent search for a Law School dean to replace former Dean Elena Kagan. “I think with the Business School it should be across the world.”

Prior to permanently assuming the deanship in April 2006, Light had been a member of the school’s leadership team for 23 years, serving as a senior associate dean and chair of the school’s finance unit.

M. Scott Daubin, co-president of the HBS Student Association, said that Light always solicited student input in making administrative decisions.

“One of best qualities that Dean Light has is that he really understands the student perspective,” Daubin said. “He was always very conscious of student opinion.”

He added that students especially enjoyed the dinners Light would often host as prizes for student-run charity auctions at the school.

Daubin said he hopes that the next dean will also have extensive experience teaching and working with business school students.

“Being inside the case method classroom is hard to replace, and I really hope the next dean has that,” he said. “We’re sorry to see him go.”

—Staff writer William N. White can be reached at wwhite@fas.harvard.edu.