Through a systematic literature review and inductive analysis of publications from 2017 to 2024, the research synthesizes diverse AI applications into ten distinct domains: Administrative Efficiency, Personalized Learning, Enhancing Teaching Practices, Decision-Making and Policy Formulation, Student Support Services, Organizational Leadership and Strategic Planning, Governance and Compliance, Community Engagement and Communication, Ethical AI Leadership, and Diversity, Equity, and Inclusion Initiatives. The resulting taxonomy, validated across various higher education contexts, provides educational leaders with a structured framework for understanding, evaluating, and implementing AI solutions in their institutions. This study contributes to the field by offering a common language and conceptual framework for researchers, policymakers, and practitioners, while also identifying critical areas for future research.