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HONOLULU - After a nearly eight-month search, the University of Hawaii Board of Regents on Wednesday chose M.R.C. Greenwood as the next president of the 10-campus system.

''I am honored to be selected as the next president of the University of Hawaii,'' she said in a statement. ''I know, and appreciate, how vitally important the university is to the state of Hawaii.''

Greenwood, 66, also said she has ''much to learn about Hawaii and its rich cultural and linguistic heritage.''

Her selection was unanimous, but critics had voiced concerns about Greenwood having no connection to Hawaii and an ethical controversy that led to Greenwood's resignation from the second-highest University of California post in November 2005.

Regents Chairman Allan Landon said the search committee and the full board were confident that Greenwood's participation in the hiring of a friend and business partner was an uncharacteristic mistake and that she had learned from it.

''If anyone has ever gone through this, it is a painful, painful experience,'' Landon said. ''Dr. Greenwood brings the silver lining of that dark cloud with her.''

Greenwood will replace President David McClain after he retires July 31. She will earn $475,000 a year, almost $61,000 more than McClain, plus receive housing at the president's residence at College Hill, a car allowance and other expenses. But Greenwood and other top administrators are likely to take pay cuts in the next fiscal year, beginning July 1, because of the state's budget crisis.

The state's financial woes will make Greenwood's new job a trying one.

As part of a larger plan to close the state's $729 million budget shortfall, Gov. Linda Lingle has said she will cut appropriations to UH in the next two fiscal years that will equal the amount saved if the system agrees to order its 7,400 employees to take three unpaid days off each month, beginning in July.

However, the university could choose to avoid furloughs by cutting expenses elsewhere.

Already, UH-Hilo administrators are pondering a nearly 10 percent cut in their $50 million annual budget.

Greenwood alluded to the financial pinch in her statement. In these times, she said, it should be remembered ''that educating citizens and producing new knowledge is the 'seed' of our society.''

At the same time, the recession is driving more students to enroll in the UH system, which operates a research university in Honolulu, baccalaureate universities in West Oahu and Hilo, and seven community colleges on Oahu, Maui, Kauai and the Big Island.

Currently, almost 54,500 students attend the 10 campuses.

Greenwood had been the lone remaining candidate the last two weeks after another finalist, Robert J. Jones, a senior academic and chief operating officer for the University of Minnesota, dropped out.

But a cloud on her record worried some.

An accomplished nutrition expert, Greenwood was the chancellor of the University of California, Santa Cruz, from 1996 to 2004 before becoming UC provost, that system's No. 2 administrator, in 2004.

But the next year, Greenwood resigned shortly before a university investigation concluded that she had violated conflict-of-interest rules when she hired her friend Lynda Goff, a UC Santa Cruz administrator with whom she owned rental property, to two lucrative positions in UC's Office of the President.

Greenwood described her actions related to Goff as ''an unfortunate and inadvertent mistake.''

But the golden parachute UC gave her rankled many in California. She was granted a 15-month leave at almost $302,000 a year, the right to return to UC Davis as a tenured professor earning $163,800 a year, and $100,000 in research funding.

Since then, Greenwood has directed the Foods for Health Initiative and held the title of distinguished professor of nutrition and internal medicine at UC Davis.

The ethical controversy led some UH employees to voice their displeasure to the regents Wednesday.

''This particular candidate has a shadow over her,'' testified Doodie Downs, an employee at Hawaii Community College who urged the regents to look for other choices. ''One candidate left standing is not enough. This is not a choice.''

But professor David Ross, speaking for the Faculty Senate, testified that his organization's members ''do not believe we can do better than Dr. Greenwood by going down the list. . . . We think the choice is clear.''