Robert L. Green resigned under pressure yesterday as president of the University of the District of Columbia after a five-hour emergency meeting of the board of trustees, ending a three-month-old controversy over Green's handling of university funds.

Board Chairman Ronald H. Brown announced that Green "had tendered his resignation" and signed an agreement with the 15-member board that entitles him to his $74,900-a-year salary and health and retirement benefits for one year. Green and his family will be permitted to remain in the university president's residence in Northwest Washington for 90 days.

Claude A. Ford, a university vice president, was appointed by the board as interim president, according to Brown. Ford, who holds a bachelor's degree in architecture, served as a UDC interim president once before, following the resignation of Green's predecessor, Benjamin H. Alexander, in 1983.

Green, 51, who remained at his university home during the board's deliberations and communicated with the trustees through his lawyer, said in a statement that he had never "used my position for personal gain." He said he resigned to put an end to negative media coverage surrounding the controversy.

"I have wrestled with a difficult decision: Has this adverse publicity, however untrue or unfair, nonetheless, so impaired my ability to run this university that I should step aside?" Green said in a four-page statement released by a spokesman.

" . . . It would be unrealistic of me to ignore the probability that my remaining as president of UDC would simply guarantee a continuation of the media barrage, and that while UDC would continue to be discussed by many, it would likely be for most of the wrong reasons."

Brown, who until recently was among Green's staunchest public supporters, said the board's decision was "very difficult" and that the final vote to accept Green's resignation was not unanimous.

The board was divided over whether to buy out a portion of Green's five-year contract, which was to expire in September 1988, or to oust him with no compensation, according to trustees interviewed after the meeting. From the outset, the 14 trustees at the meeting all agreed that Green had to go, but there were differences over each aspect of the agreement finally adopted.

Despite differences of opinion, board members said that the meeting went smoothly. After reaching its decision, the board sent an aide to Green's house with a copy of the agreement for his signature. Brown received a round of applause from his colleagues at the end of the session.

"Over the past several months the board, the president and the community have endured an extremely critical period in the history of our university," Brown said in a statement on behalf of the board. "We fully appreciate the concerns of the community regarding issues of fiscal management and . . . we want to reassure students, faculty and all of the citizens of our community of our unwavering commitment to provide quality education in an atmosphere conducive to learning."

Green, a longtime civil rights activist and a former dean at Michigan State University, first ran into trouble in June, after The Washington Post reported that he had spent $83,200 for parties and receptions and had traveled extensively, at UDC expense, including some trips to weddings and funerals.

Concern about Green's use of UDC funds increased with additional reports about the purchases of new furnishings for the president's residence and lucrative consulting contracts for several of Green's former colleagues at Michigan State, including Cassandra A. Simmons, a former student of Green.

D.C. Auditor Otis H. Troupe challenged the expenditure of thousands of dollars of UDC funds for consultants, travel and flowers and concluded that Green had misspent at least $13,000 from the representation fund, which is used to pay the president's expenses while on official business. Troupe also took issue with Green's use of $11,974 of the $30,000 that was set aside for his transition from Michigan State to UDC.

U.S. Attorney Joseph diGenova disclosed Aug. 12 that his office, responding to a letter from Trustee Joseph Webb, had begun reviewing allegations of financial improprieties at UDC. The following day the FBI entered the case.

Mayor Marion Barry, who remained silent throughout much of the controversy, earlier this week urged the trustees to quickly end the controversy. Yesterday, following the board's meeting, Barry said he was "pleased that the board of trustees has moved forward to bring this matter to a conclusion."

"It is unfortunate that the issue of expenditures by the president, Robert Green, had to be dragged through a long, drawn out daily airing in the press before some action was taken," said Barry, who also called for reforms of the university's financial and administrative practices.

Wilmer Johnson, Faculty Senate president, said faculty members are "extremely disturbed" by the board's decision to appoint an interim president without first consulting the faculty.

"It's unacceptable to us without any consultation . . . absolutely unacceptable," Johnson said. "Anyone who would be appointed without " some consultation would be unacceptable."

Johnson said nine faculty members were meeting to discuss what action the faculty could take to challenge the board's move.

D.C. City Council member John A. Wilson (D-Ward 2) said "Good!" when told Green had resigned. "The UDC budget should be cut deeply and this would force a reorganization."

Negotiations over Green's departure intensified during the past two days, according to board chairman Brown, who added that discussions with Green about his future had taken place during the past month. Green's personal attorney, Thomas Atkins of New York, met with Brown here on Wednesday, university sources said. On Thursday, Brown and Herbert O. Reid Sr., a trustee who is also legal counsel to the mayor, met with Atkins in New York.

Atkins did not attend yesterday's board meeting but spoke with Brown by telephone after the board's final vote, according to sources. Green immediately accepted the terms offered by the board.

Green originally hoped to get a settlement of $500,000, sources said. However, by the time the trustees met yesterday he had agreed to an amount slightly higher than his annual salary, according to sources.

During the past week, Green made a frenetic attempt to hold onto his job, phoning UDC officials with pleas for support and trying to rally national leaders and other college presidents to his cause, university sources said.

Although pressure had been building on Green for two months, a spate of revelations during the past three weeks about his expenditures for personal items led some trustees to question whether Green should remain.

The turning point for Green appeared to come earlier this week, when trustee Donald A. Brown became the third board member to publicly call on Green to step aside and new disclosures about Green's expenditures came to light.

Green was the third president to serve at the troubled eight-year-old university, and his resignation is likely to usher in a period of uncertainty as trustees search for his successor.

In addition to voting for Green's departure, the trustees also voted to require the UDC internal auditor to report directly to the board instead of to the administration, and to review the contracts of all senior personnel at the university. The fate of Green's top aides, several of whom were recruited from Michigan State, was uncertain.

Earlier this week, all eight UDC deans asked that Green and his three chief administrators be placed on administrative leave pending the outcome of investigations and audits.