"Being a part of a program that values integrity, it is important to let everyone know of a poor decision I recently made," McGary said in a statement released by the school Friday. "I tested positive for marijuana during the NCAA tournament. We were notified of that result after the Final Four."
"I regret thoroughly disappointing my family, coaches and administration," the statement read. "Despite all of this they have been understanding and helpful over the last couple of weeks. I take full responsibility for this poor choice and want to apologize to everyone, especially those I have grown close to during my fabulous two years at the University of Michigan."
The 6-foot-10 McGary played in only eight games in 2013-14 before a back injury ended his season in mid-December.
Yahoo! Sports reported that McGary failed a drug test administered by the NCAA following the Wolverines' Sweet 16 victory over Tennessee, a game in which McGary suited up but had no intention of playing.
He told Yahoo that he smoked marijuana one night in mid-March. "The penalty is a year," McGary told the website.
The NCAA says its year-round testing program generally does not involve street drugs or stimulants, but its NCAA championship testing program -- which includes events such as the basketball tournament -- may include tests for those drugs. NCAA rules say that a positive test results in ineligibility for a calendar year.
Athletes at Michigan are subject to random, year-round drug testing under the school's policy, but if McGary had been caught under that program, the penalty could have been much less severe. Under Michigan's rules, a first offense calls for an immediate one-week suspension from team activities. In addition, the athlete "must sit out the next 10 percent of the maximum allowable contests during the traditional competitive season or postseason of their respective sport."
"It's just with the NCAA and their strict rules, they don't show any mercy," McGary told Yahoo. "They take their things seriously."
As a freshman, McGary had a strong showing in Michigan's run to the national title game. He elected to return to school after the Wolverines' loss to Louisville in the final even though he was widely considered to be a first-round draft pick at the time.
His stock fell after the back issues that began this past offseason. According to multiple NBA scouts, McGary is a likely second-rounder -- depending on how his medical testing goes with NBA teams.
These 2 years have been a blessing for me! Thanks for the great memories! Love this place but it's time to move forward! Forever #GOBLUE????- Mitch McGary (@mitchmcgary4) April 25, 2014
McGary averaged only 7.8 points and 6.6 rebounds in his two-year career at Michigan, but his potential is tantalizing. In Michigan's six NCAA tournament games in 2013, he averaged 14.3 points and 10.7 rebounds.
Although he was injured most of this season, he remained a fan favorite and an energetic presence on the Michigan bench.
"Mitch has had a tremendous impact on our program from the moment he committed to us," coach John Beilein said in a statement. "The progress he has made on and off the court has been outstanding. His willingness to face a personal issue head on and his positive work ethic during his recent injury have helped him to grow in many ways."
The Associated Press contributed to this report.