The scandal also forced former athletic director Tim Pernetti, the university's interim general counsel and assistant coach Jimmy Martelli to resign.
Jordan, 58, played for the Scarlet Knights from 1973-77, and was the point guard on the team that went to the Final Four in 1976. He interviewed for the position in 2010, as well, when Rice eventually landed the job.
He'll have plenty of work to do. Rutgers went 15-16 last season, and since the schedule ended, five Scarlet Knights have asked to leave the program. The latest is starting guard Eli Carter, who broke his leg late in the season.
The NCAA on Monday said it will work with the receiving institutions to process each transfer request, and including waiver requests to forego sitting out a season. Those will be judged a case-by-case basis.
"NCAA staff is prepared to move quickly in reviewing any request it receives," the NCAA said in an email to The Associated Press.
Rice did not make it to postseason play in his three years on the job, and Rutgers overall hasn't been to the NCAA tournament since 1991. Jordan's first season will be Rutgers' last in the Big East, and the Scarlet Knights will join the Big Ten in 2014-15.
Jordan's selection has been well received at the university, which has been embarrassed by the video's fallout, and had some donors threaten to cut off funding. The university subsequently is reviewing all of its sports and suspended men's lacrosse coach Brian Brecht indefinitely on Friday for allegations of verbal abuse.
Former Rutgers teammate Mike Dabney said Jordan faces a major challenge.
"There is no doubt this is a double-edged sword but we don't need to turn the reins over to another stranger," Dabney said in a telephone interview with The AP. "I think a Rutgers guy is the right person at the right time. This is not going to be a sprint back to respectability for the program."
Dabney, now a mortgage loan officer with Wells Fargo Bank, described Jordan as a hard-working competitor. When he lived in Portland and Jordan came there with the Sacramento Kings, the two would get together for lunch. It was always a short lunch. Jordan had to get back to break down videotape.
"It is going to be a marathon," Dabney added, "and hopefully the fan base will understand that and the people will be more supporting and those who are supporting and donating to the program understand it is not going to be an overnight situation."
Jordan has been a head coach in the NBA with Sacramento, Washington and Philadelphia, posting a 257-343 record. He played in the NBA from 1977-84, winning a championship with the Lakers in 1982.
Besides the Lakers, Jordan also served as an assistant coach with Sacramento and New Jersey, helping the Nets reach the NBA Finals twice (2002, 2003).