This paper investigates the ethical integration of artificial intelligence (AI) in higher education, addressing the urgent need for institutions to adopt frameworks that ensure responsible use. While AI offers transformative potential on personalized learning, administrative efficiency, and enhanced teaching, it also introduces challenges related to data privacy, algorithmic bias, academic integrity, and student autonomy. Through a critical conceptual analysis supported by key examples from existing practices and scholarly literature, this paper identifies the core ethical risks associated with AI deployment in universities. It then proposes a multi-stakeholder institutional framework grounded in transparency, accountability, and equity, designed to guide ethical AI adoption across educational contexts. The paper contributes a structured model that integrates AI literacy, inclusive governance, and proactive policymaking as essential pillars for sustainable implementation. By aligning technological innovation with educational values, the work offers practical strategies for institutions seeking to use AI responsibly and ethically. This contribution is aimed at educators, administrators, and policymakers who must navigate the growing intersection of digital technologies and academic ethics.