"I am electing to retire so that I can spend more time speaking and conducting research of my choosing," physics professor Steven Jones said in a statement released by the school.
His retirement is effective Jan. 1, 2007.
Jones recently published theories about U.S. government involvement in the events of Sept. 11, including one suggesting that explosives inside the World Trade Center — not airplanes striking the twin towers — brought the complex down.
BYU stripped Jones of two classes and put him on leave in early September. It also began investigating his research.
The school abandoned its review Friday after reaching a retirement agreement with Jones, BYU spokeswoman Carri Jenkins said.
Jenkins said the school did not pressure Jones to retire.
Jones, who helped found a group called Scholars for 9/11 Truth in 2005, said he plans to continue researching and speaking about his Sept. 11 theories. That includes completing an analysis of soils and metals from the towers that led him to the conclusions in his paper "Why Indeed Did the World Trade Center Collapse?"
Jenkins said Jones, not BYU, owns the materials.
Jones has not apologized for his remarks and declined comment on whether he regretted his disagreement with the school.
"I have a stewardship for my research and my teaching and my work, and I'm doing my best on that," he said.
Jones began teaching at BYU, which is owned by The Church of Jesus Christ of Latter-day Saints, in 1985.