The University of Minnesota fired head men’s basketball coach Tubby Smith on Monday after six seasons with the team, ending an era marked by improvement, underachievement and scrutiny.

Smith’s dismissal also comes at a cost of more than $3 million for an athletics department that has borrowed millions from the University’s central fund in recent years.

The school must pay the 61-year-old coach $2.5 million to fire him without just cause. It also owes him a $250,000 retirement contribution and about $450,000 in base and supplemental salary over the next three months.

Smith was the highest-paid employee at the University in 2012, making more than $700,000 in base salary and almost $2 million overall.

Gophers athletics director Norwood Teague said at a press conference Monday that the University will internally conduct a national search for Smith’s replacement.

“I just felt like this was the time to have a fresh approach,” Teague said. “I hope we’ll see this as an investment rather than a needless expenditure because this program needs to be good and has the potential to be good, if not great.”

Smith’s firing comes a day after the Gophers’ season ended with a loss to Florida in the NCAA tournament’s round of 32. Minnesota’s victory over UCLA last Friday marked the school’s first NCAA tournament win since 1997, but Smith’s team finished the 2012-13 season with four losses in its last five games.

Teague said the University decided to fire Smith based on his body of work. Smith was 124-81 in his six seasons with the Gophers, but he was 46-62 in the Big Ten and never had a winning conference season.

Smith took over a struggling Minnesota program in 2007 after 10 years at Kentucky, a powerhouse school that he coached to one NCAA title and six Sweet Sixteen appearances.

Prior to Smith’s arrival, the Gophers had made the NCAA tournament once in seven seasons under former coach Dan Monson. Minnesota improved immediately under Smith and made the NCAA tournament in 2009 and 2010, but it missed the tournament the next two seasons while going 12-24 in the Big Ten.

This season was one of Smith’s most accomplished at Minnesota, as the Gophers went 21-13 overall and 8-10 in the Big Ten. But it failed to live up to high expectations driven by a talented, experienced roster.

“Our staff did things the right way and will leave knowing that the program is in far better shape than when we arrived,” Smith said in a release Monday.

Teague stressed throughout Monday’s press conference that the Gophers’ next coach must be a good fit for the program and school — not necessarily the most popular coach on the market.

But Minnesota is not considered a destination job for high-profile coaches, especially because it is the only Big Ten school besides Northwestern without a basketball practice facility.

“Certainly it’s our intention to build one,” Teague said, “and I want the new coach to know that.”

Teague said he hasn’t spoken to any candidates to replace Smith but has a “short list” of candidates in mind.

“Some are realistic,” he said. “Some are unrealistic.”

Mounting costs

The practice facility will be included in Teague’s “master facilities plan,” which he has publicized since becoming Minnesota’s athletics director last July.

The plan, which Teague has estimated will cost between $80 million and $125 million, and Smith’s buyout are among several hefty athletics expenses the University will incur in the next few years.

Gophers athletics is paying $800,000 to the University of North Carolina to cancel a two-game football series in 2013-14. The decision was heavily criticized by fans and media, but head football coach Jerry Kill defended it.

The athletics department also owes the University’s central administration $400,000 annually until 2017 to cover buyout costs for former coaches Glen Mason, Dan Monson and Tim Brewster, the Star Tribune reported last month.

Teague has also said he wants to give a raise to Kill, who makes $1.2 million per year leading a football program that is struggling to sell tickets.

Gophers athletics borrowed $2.3 million from the University’s central fund in the 2011 fiscal year. The University’s athletics subsidy has steadily decreased from $6.8 million in 2002.

“We know we are going to be in good shape [financially],” Teague said. “I really do feel good about that. … If we did not feel good about that from our own budget, we would not have been haphazard about a decision like [firing Smith].”

The recruiting factor

Smith’s critics often cited the coach’s poor recruiting ability as a reason to fire him.

But the University won’t be able to recruit at all until a new coaching staff is hired. Teague said he wouldn’t put a time frame on replacing Smith.

“You want to move quickly, and you want to hustle,” he said, “but you don’t want to be too much in a hurry.”

Smith’s firing comes during a time when coaches across the country are battling for three top 2014 recruits from the state of Minnesota — Tyus Jones, Rashad Vaughn and Reid Travis.

All three recruits had developed relationships with members of the Gophers’ coaching staff through the recruiting process. Despite those relationships and Smith’s reputation as a high-profile coach, the Gophers were considered underdogs to land any of them.

In today’s landscape of nonstop recruiting, every day of inactivity furthers the Gophers’ disadvantage.

But a new coach could open doors to elite high school players — the type Minnesota has struggled to recruit historically.

“It’s my intention to bring in somebody that will compete with everybody in the country and on a national level to recruit,” Teague said.