Yeah, he didn't resign.
He was fired.
He announced his intention to retire at the end of the season but the University decided not to wait and relieved him of his duties within about a day of his announcement.
yeah, you're right... I forgot about the way it ended
according to wikipedia, the way he left adds a bit of dark comedy to the whole thing.
turns out he first tried to retire before the 2011 season started, in exchange for a $3 million dollar "early retirement bonus." He certainly knew the judgment of history was fast approaching (the Grand jury was convened in 2010; McQueary's testimony was in Dec. 2010). they never reached a deal though and negotiations continued as the season started, with Paterno's retirement package eventually growing to include payouts and benefits totalling $5.5 MILLION, including paying for 25 years of private jet travel for him (he was EIGHTY FIVE! he expected to live to 110?).
after the scandal publicly broke, he offered to resign at the end of the season but in his public resignation statement demanded the Penn State board of directors stay out of it, claimed he was doing them a favor, and said they had more important things to worry about. they decided the bad press was only going to get worse, rejected his offer and canned him.
wikipedia also says that under the threat of legal action from the Paterno family, including defamation (!!!), and hate mail from the sort of assholes that defend paterno and cheer for penn state, the university agreed to pay most of the retirement package to the Paterno family/JoePa estate. maybe the school's law department figured the lawsuit would be like wrestling a pig... even though they'd probably win on the defamation claim (since Paterno did, after all, cover up & enable decades of child abuse), they'd still come out of it looking dirty. and paterno's clan had nothing to lose by that point, so they'd probably go all out on who in the university administration knew what and when.
unfuckingbelievable.
oh, and Nike renamed the "Joe Paterno Child Development Center" outside its HQ in Oregon around this time. I guess thats what that Onion article i posted was making fun of.
of all the things to name after JoePa... they picked a child development center. yikes.