The news was revealed in the middle of a press conference Monday afternoon that was intended to explain the details surrounding the resignation of Chancellor James Oblinger.
UNC system President Erskine Bowles said that the school is terminating it's relationship with Easley.
MARY EASLEY INVESTIGATION
The university also announced Monday that it filed its initial response with the US Attorney regarding the Easley investigation. The US Attorney's office issued subpoenas for documents related to Easley's hiring.
And that investigation is related to the federal investigation of former Governor Mike Easley.
According to NC State, "The filing includes e-mails, memos, letters and redacted personnel-related documents from a variety of sources, including the chancellor, provost, former Board of Trustee Chair McQueen Campbell and various other individuals and departments."
According to e-mails handed over to federal grand jury, it appears several people had their hand in Easley's hiring.
In one, it shows Campbell with a clear line to the Governor, saying the Governor would speak to his wife directly about exactly what she wanted.
Former federal prosecutor Kieran Shanahan says the e-mails may prove to be damaging evidence considering glaring inconsistencies in public statements made by Oblinger, Nielsen and others.
"I don't think it's fair to say the hiring of Mary Easley was an ordinary course of the university's business, it wasn't an opening for which she applied, it appears the job was created for her," Shanahan said. "Applying for a job may not create a problem, but asking for a job to be created could be problematic. But again you have to look at the motivation of those who gave the job."
The university said it is fully cooperating with the investigation of Mary Easley and that it is continuing to revue records and collect documents as requested in the subpoenas.
Senate Republican leader Phil Berger issued a following statement that alludes to a possible cover up.
According to Berger, the newest documents released by NC State as part of the federal investigation show that former Gov. Mike Easley and some of his administration helped create a position for Mary Easley.
In part, his statement reads, "There clearly has been a concerted effort to cover up the circumstances surrounding Mary Easley's hiring and employment at N.C. State. The new revelations that Mike Easley was directly involved in the hiring of his wife only confirm many of our worst suspicions. Powerful Democrats in state government have ceased pursuing public service and begun trading exclusively in privilege and power. Meanwhile, Democratic legislative leaders have become co-conspirators in this corruption by turning a blind eye to wrongdoing and adamantly refusing to ask the questions that might uncover the truth."
CHANCELLOR OBLINGER RESIGNATION
Bowles said earlier in the day that UNC Charlotte Chancellor Emeritus Jim Woodward will serve as interim chancellor at NC State. Woodward served as UNC Charlotte's chancellor for 15 years and retired in 2005.
Click here to read the memo Bowles issued to the UNC Board of Governors Monday morning
NC State issued its own statement in conjunction with Oblinger.
Click here to read those statements
In the statement, Oblinger addressed the controversy surrounding former first lady Mary Easley and cited that controversy as his main reason for resigning.
"The only reason I am announcing my intention to resign is that I am applying to myself the same standards I have asked Mrs. Easley to apply to herself: I am doing it because it is in the best interests of NC State University," Oblinger said.
Governor Bevelry Perdue weighed in on the situation and said she believes the university and Oblinger are taking steps that are in the university's best interest.
"Today's announcements are the appropriate steps to enable the University to keep its eye on the prize -- education, collaboration, discovery and leadership," Gov. Perdue said. "Recent events have become a distraction from the core mission of NC State faculty, staff, and students. I'm confident in Chancellor Emeritus Woodward's ability to lead the University on an interim basis and to maintain its focus on excellence in education and innovation."
NC State's board of trustees is scheduled to held its second emergency meeting Monday afternoon. It held its first one Sunday night. The university has been under fire since details of Easley's hiring and salary came to light.
Meanwhile, Easley did show up for work Monday, but she avoided repeated questions about her hiring from Eyewitness News.
TRUSTEES REVIEW NIELSEN'S PAY
In Monday's emergency meeting, the board is scheduled to continue discussing the severance package for former provost Larry Nielsen, the official who hired Mary Easley.
The board's executive committee met Sunday in an emergency closed session and approved the release of a document which outlines Nielsen's pay for the next three years.
Click here to read those documents
The announcement to review his salary came after the UNC Board of Governors called for an investigation into Nielsen's severance package.
Nielsen's resignation is tied to the controversial pay raise the university gave the former first lady.
The controversy over her job came to a head on May 22 when Nielsen, who hired Easley and gave her an 88 percent pay raise, stepped down.
Nielson resigned from his $298,000 a year job to go back to work as a NC State professor. Then late last week, the university said he would get six months of provost pay before getting a salary comparable to his colleagues.
During Sunday's emergency meeting, the trustees did not address the issue.
NC State officials said they will review Nielsen's severance package, especially given the state's $4 billion budget shortfall.
The UNC Board of Governors also wants a review. However, a spokesperson for the university said he doesn't know when the reviews will be finished.
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