He compared the experience to Stringfellows, the infamous London lap-dancing club, and the comments were made in a light-hearted article in Times Higher Education magazine focusing on the seven deadly sins of university life.
"Most male lecturers know that, most years, there will be a girl in class who flashes her admiration and who asks for advice on her essays. What to do? Enjoy her! She's a perk," the Telegraph quoted Kealey's piece on "lust".
However, the National Union of Students condemned his comments by saying that they displayed an "astounding lack of respect for women".
On the other hand, supporters of Kealey, who is a clinical biochemist who has led Buckingham, Britain's only independent university, since 2001, insisted that the remarks were intended as a joke.
In his piece, Kealey, author of the book Sex, Science and Profit, said there was a "myth" that an affair between a student and her male "academic lover" represented an abuse of his power.
"What power?" he asked.
"Thanks to the accountability imposed by the Quality Assurance Agency [the university standards watchdog] and other intrusive bodies, the days are gone when a scholar could trade sex for upgrades.
"I know of two girls who, in 1982, got firsts in biochemistry from a south-coast university in exchange for favors to a professor, but I know of no later scandals," he said.
But he added that some female students still "fantasise", citing a reference to characters in Middlemarch, by George Eliot, and The History Man, by Malcolm Bradbury.
"She doesn't yet know that you are only Casaubon to her Dorothea, Howard Kirk to her Felicity Phee, and she will flaunt you her curves. Which you should admire daily to spice up your sex, nightly, with the wife," he said.
"Yup, I'm afraid so. As in Stringfellows, you should look but not touch.
"So, sow your oats while you are young but enjoy the views - and only the views - when you are older," he stated.
The academic, who studied at Oxford and has lectured at Cambridge, has helped turn Buckingham into one of the most popular universities in the country.
But his comments have sparked a debate among academics on the Times Higher Education website.
"I am appalled that a university vice chancellor should display such an astounding lack of respect for women," Olivia Bailey, women's officer at the National Union of Students, said.
"Regardless of whether this was an attempt at humor, it is completely unacceptable for someone in Terence Kealey's position to compare a lecture theater to a lapdancing club, and I expect that many women studying at Buckingham University will be feeling extremely angry and insulted at these comments," she stated.
A spokesman for the University and College Union said that it appeared to be satirizing "harassment".
"Harassment is not something to be taking lightly and I would be surprised, and deeply concerned, if any university, or vice-chancellor, tried to laugh it off," he added.