Holloway didn't elaborate on which schools he's considering for transfer, but mentioned Clemson, College of Charleston, Winthrop and Coastal Carolina as being close to his home in Irmo, S.C.
With the sudden decision, Kennedy has yet to discuss any transfer restrictions for Holloway, such as the ability to play for a member Southeastern Conference institution.
However, he fully supports Holloway, though he was surprised when the 6-foot-7, 230-pounder broke the news in a meeting between the two earlier this week.
"I didn't see this coming," Kennedy said. "I've tried to digest it all and give him some guidance as to what the next step is. Murphy and his mother are concerned about the distance and the responsibility. It's just part of the process. You never know what's around the next corner as a coach."
Kennedy received a phone call from Holloway's mother on Wednesday and tried to offer the best advice for the situation.
"Murphy was really concerned about how we would feel about it; were we going to be mad at him," Kennedy said. "That's not going to be the case. I understand it. We're going to continue to support him."
Today's announcement, it should be noted, will have no affect on the upcoming decision regarding the future of DeAngelo Riley.
Kennedy mentioned Riley has some issues to resolve off the court and the staff plans to move on Riley's status by the end of the semester.
"We're in conversations there about what's in his best interest," Kennedy said. "Everybody has different motives. Some guys it's between the lines. Some guys, as it is with this situation, it's off the court."
Holloway's departure is a huge loss for the Rebels, who have already seen Eniel Polynice and Terrico White declare for the upcoming NBA Draft. Polynice has signed with an agent, while White has the option of pulling out and returning to school. He has until May 8 to withdraw his name.
Nonetheless, Holloway is the fourth starter in two seasons to leave the program, following David Huertas and Malcolm White in the 2008-09 season.
"He's established an identity here," Kennedy said of Holloway. "He's grown with this team. Honestly, as a coach, you never want to lose a player of his caliber. But when you look at this thing from a big-picture perspective, to me it's a sign of his continued maturation. He understands he has a responsibility far greater than getting rebounds and scoring baskets."
A rising junior, Holloway averaged 10.1 points and 7.6 rebounds per game last season. His 259 total rebounds easily led the team, with the next closest being White with 160. He also logged the third-most minutes at 25.7 per game.
"I like being here. It's a great place," Holloway said. "Unfortunately, my family called and they need me. Since my little girl was born, (my family) has always thought I might need to come home. But this was a place I thought I could succeed from. I wanted to stick it out."
Before today's surprising announcement, Ole Miss had 14 players on its roster. Only 13 can be on scholarship, with the remaining slots now consisting of returners Chris Warren, Trevor Gaskins, Terrance Henry, White, Nick Williams, Reginald Buckner and DeAngelo Riley.
Ole Miss has added four players in the 2010 signing class, including recently announced forward Isaiah Massey and guard Donald Williams.
Williams, a former Kentucky transfer, averaged 16.6 points per game for Antelope Valley Community College. Massey, meanwhile, is a 6-foot-8, 225-pounder from TAAG Academy in Tampa, Fla.
The pair joins DeMarco Cox, a three-star forward who plans to report in June, of Yazoo City and Dundrecous Nelson, a three-star guard from Jackson.
"My job is to make sure we field a competitive team," Kennedy said. "Now with this latest development, we have a scholarship opportunity that we'll try to fill."