Baddour, whose contract was to end in June 2012, said he felt it was important for a new director to be in place before the school named a new permanent football coach.
And, "in time to recruit the next season's freshman class," said Baddour.
"It is my responsibility to do what is in the best interest of the program and this is my decision," he continued.
Baddour will continue to serve as AD until his replacement is named and he will help represent the school at a NCAA infractions committee hearing in October.
Thursday's announcement came after Chancellor Holden Thorp fired football head coach Butch Davis Wednesday over concerns about an ongoing scandal involving academic misconduct and allegations that players got perks from professional sports agents.
Everett Withers will serve as interim coach, effective immediately. He will address the media Friday at the Kenan Football Center at 3 p.m.
"We've selected Everett Withers to lead the football program," Baddour said. "The Chancellor and I spoke with him this afternoon and we believe he has the leadership qualities to help our student-athletes deal with the challenges ahead. We are fortunate to have someone with his credentials and background. He is ready for this position."Withers, a native of Charlotte, N.C., has served as Carolina's defensive coordinator and secondary coach the last three seasons. Details will be available at a later date. With Withers' promotion, the Tar Heels will begin the process of hiring a full-time assistant to complete the staff.
"I believe Everett is the right person for our football program under these challenging circumstances," Thorp added. "I am impressed with the relationships he has built with our players and staff, and it is our top priority to help our student-athletes going forward. I believe he can help our students succeed at the highest level both on and off the field and in the classroom."
Last year, Carolina's defense ranked fourth in the ACC and 30th in the country despite a roster decimated by personnel losses and injuries.
At a news conference Thursday morning with Baddour at his side, Thorp reiterated that the investigation of the scandal had not turned up anything new.
"This is really about the cumulative effect on the school's academic reputation," said Thorp.
Thorp said he does not believe Davis knew of the problems that led to the NCAA allegations. He also said the former coach is entitled to $2.7 million that is owed to him under the remainder of his contract.
Despite that huge amount, Thorp said the school's academic reputation is a "value beyond any dollar figure."
Thorp admitted that the timing of the decision to fire Davis was "terrible" given that the start of fall practice is just days away.
Speaking to the school's football players, Thorp said: "You have been through a lot and I know that this is adding to that. I want you to know we are behind you."
UNC's problems began last year when the school announced it was looking into academic misconduct and allegations that players got perks from professional sports agents.
In all, 14 players missed at least one game because of the probe with seven being ruled out for the entire year. An eighth was cleared to return at midseason but decided to redshirt.
Last month, North Carolina received a notice of allegations from the NCAA outlining numerous "potential major violations" in the football program, including unethical conduct by a former assistant coach as well as failure to adequately monitor the conduct of a former and current players.
The timing of the news of Davis's firing was stunning considering that the coach said as recently as Monday that he felt he had the full support of school administrators. In a statement Wednesday night, Davis said he was "honestly shocked" by the dismissal and called it "a sad day."
"I can honestly say I leave with the full confidence that I have done nothing wrong," Davis said. "I was the head coach and I realize the responsibility that comes with that role. But I was not personally involved in, nor aware of, any actions that prompted the NCAA investigation."
Baddour has been the athletic director at UNC for 15 years. At the end of his contract in June, he will have 45 years of service with the school. Thorp said he will be paid for the remainder of his contract.
Baddour said he recognized the loss of a head coach at a critical time in the pre-season would be hard on players, but he said they had shown a remarkable ability to deal with adversity at the height of the investigation last fall.
"I expect they will react in a similar fashion this year and I pledge to them my support and that of my administration in helping them do great things," he said.