AMR Corp., parent company of American Airlines, said yesterday that it is spinning off its 83 percent interest in Sabre Holdings Corp., which runs the world's largest computerized airline reservation system.

Fort Worth-based AMR said it would distribute 107 million shares of Sabre common stock to AMR shareholders on the basis of 0.7 shares of Sabre stock for each share of AMR stock owned. The transaction is subject to a ruling by the Internal Revenue Service that the spinoff would be tax-free to AMR and its stockholders.

In addition, Sabre would pay a one-time $675 million cash dividend--$5.21 per share--to its shareholders, including AMR. "The proceeds of the dividend will be used by AMR to enhance its already strong balance sheet," AMR said in a statement. "Over time, it will also enable AMR to pursue options to invest in its core airline business."

If the IRS tax-free approval comes through, the spinoff will be completed in the first quarter of 2000, AMR said.

The news sent AMR's stock soaring. It close up $4.84 3/8, or more than 7 percent, at $68.50. Shares of Sabre, which also runs the online reservation service, rose more than 5 percent, or $2.87 1/2, to $54.75.

American did not invent the computer reservations system, but former AMR chairman Robert L. Crandall developed it into a powerful marketing and operations tool.

Sabre Holdings itself evolved from the American reservations system. In 1996, AMR reorganized Sabre as a separate subsidiary and and made an initial public offering of about 18 percent of Sabre stock.

Sabre said William J. Hannigan, 40, has been appointed its new president and chief executive. Hannigan was president of SBC Global Markets, a subsidiary of Southwestern Bell.

William J. Carty, AMR chairman and chief executive, said the transaction will allow each company to concentrate on its core product--AMR on American and American Eagle, and Sabre on staying the leader in transportation information technology. He said it will also allow Sabre and to "capitalize on numerous opportunities in the rapidly evolving technology sector."

Carty also said the deal should enhance the price of both companies' stock. "By having two completely separate companies valued in the market, both AMR and Sabre should benefit from clearer market comparisons with their peers," Carty said. "This should result in a stock price for both companies that more appropriately reflects their full value and potential."

American and Sabre reached an agreement in 1996 for Sabre to continue to supply the airline with "substantially all" of its information technology needs, including reservations, flight operations and other real-time services. Yesterday, the companies agreed to extend that agreement for two years to 2008.