Kelly said his decision followed media coverage of his comments.
"Having had time to carefully consider the views of many staff, students and stakeholders, I believe that it is in the interests of the University that I step aside," he said.
Kelly had told Rural News that when he went through vet school it was dominated by men.
"Today it's dominated by women.
"That's fine, but the problem is one woman graduate is equivalent to two-fifths of a full-time equivalent vet throughout her life because she gets married and has a family, which is normal.
"So, although we're graduating a lot of vets, we're getting a high fall-out rate later on."
Kelly is a Massey University graduate who worked as a veterinarian and for 12 years headed the state-owned enterprise Landcorp before his retirement in 2013.
He has been a member of the Massey University Council since 2005 and Chancellor since 2014. The chancellor chairs the University Council, which is responsible for governance of the University.
In the Queen's Birthday Honours this year he was made an Officer of the New Zealand Order of Merit (ONZM) for services to agriculture.
