In a surprise move, the trustees of Minnesota State Colleges and Universities have rejected the three finalists for the system's top job and on Friday named Devinder Malhotra, the current interim chancellor, to the permanent job.

It's the second year in a row that the trustees have bypassed the finalists chosen in a national search and turned to Malhotra, the former interim president of Metropolitan State University, to head the system's 30 two-year colleges and seven state universities.

"The board concluded that none of the three [finalists] were the right individual to serve as chancellor," the trustees said in a statement released Friday. The finalists, who had been named by a search committee last week, were Neal Cohen, a former airline executive; Dr. Ricardo Azziz, a university academic health official; and Van Ton-Quinlivan, a vice chancellor from California's community colleges.

"Malhotra has accomplished much during his service as interim chancellor," Michael Vekich, the board's chairman, said in Friday's announcement. "He has brought a laser focus to student success, and he has reaffirmed our commitment to diversity, equity, and inclusion by fostering a culture in which we can have difficult conversations about critical issues."

Last year, Malhotra agreed to step in as interim chancellor for one year after the board rejected the finalists chosen in the first yearlong search.

But on Friday morning, he said, Vekich asked if he would stay on for a full three-year term, dropping the interim label.

Malhotra, 70, said he was "humbled and honored" to accept the job. "Higher education is facing some strong headwinds, but at the same time, rethinking our profession is also a very exciting opportunity," he said.

His predecessor, Steven Rosenstone, retired as chancellor last summer.

Earlier this week, the three finalists, who were selected by a 22-member advisory committee, held a series of meetings with trustees, college officials, faculty and students in a bid to win the top job.

Monte Bute, a Metro State professor, publicly challenged the trustees to keep searching. "The three finalists seem even less qualified than those for last year's failed search," he wrote in an open letter in Thursday's Star Tribune. "The board of trustees had better keep interim Chancellor Devinder Malhotra warmed up in the bullpen."

On Friday morning, the trustees approved a three-year contract for Malhotra. Officials disclosed Monday that the chancellor search cost $141,566, including $100,000 in consulting fees.

Faculty leaders praised the board's decision. "It was a very tough one to make, I'm sure, but Devinder is who we need in that leadership role at this point," said Jim Grabowska, president of the Inter Faculty Organization, which represents instructors at Minnesota State's four-year universities.

Kevin Lindstrom, president of the Minnesota State College Faculty, said the trustees may face criticism for scrapping a second national search. But "they did the right thing, and I commend them for it," he said. "Chancellor Malhotra has done wonders to build an environment of trust in the system."

Minnesota State serves more than 375,000 students a year on its 54 campuses.

Malhotra, who retired as interim president of Metropolitan State in 2016 after more than four decades in academia, said he had no regrets about returning to head the system.

"I'm having a lot of fun," he said. "I would frankly admit to you I failed retirement very badly. So I am a little bit hesitant in trying it again."

Maura Lerner • 612-673-7384