"I always knew there would come a time when I would want to make a transition," Axelrod said before the formal announcement Thursday of the new institute, which he will head starting in 2013, after the November presidential election.
Axelrod sold his interest in his Chicago-based political consulting firms after helping Obama reach the White House, and he said if he does any consulting in the future, it will not be campaign-related.
"My association with the president has been the most rewarding experience of my long career, and I can't think of anything more that I could do that would be comparable to that. I think it's a good time to say, 'One last campaign.'"
Axelrod said he would try to pattern the new institute after one at Harvard University, where he said he would finish serving out the year as a board member of the Institute of Politics, launched as a memorial to President John Kennedy.
With the possibility that an Obama presidential library could be established at the U. of C., where the president lectured on constitutional law, Axelrod said he would "want to take advantage of any assets that we can that would enhance" the new institute.
"As for the (Obama) library," he said, "I'm working hard, as you know, to make sure the president doesn't have to make that decision for a good, long time."
Axelrod said the new institute, on a quarterly basis, would bring on campus noted fellows from politics and related fields, including journalism, to share their experiences with students. The institute also will run an internship program to place students in political and public policy positions.
Among those who have agreed to serve on the board of the new institute are Republican media consultant Michael Murphy; historian and author Doris Kearns Goodwin; Deval Patrick, the Massachusetts governor and former Axelrod client; and University of Chicago alumni Howard Wolfson, a Democratic political strategist and top aide to New York Mayor Michael Bloomberg, and David Brooks, a columnist for The New York Times.
Axelrod, a former political writer for the Chicago Tribune before becoming a political media consultant for the late Paul Simon's winning Senate campaign in 1984, said the institute would be "studiously nonpartisan or multipartisan" in scope.
"I have many colleagues on the Republican side with whom I have deep disagreements on policy but who I have admiration for because of their commitment to this country and their passion for the political process," Axelrod said.
"I want these young people to see that, and I hope this institute produces leaders within both parties and beyond the parties, and my goal is to immediately encourage young people to think about careers in politics and in the public arena," he said.