NEW YORK, AUG. 9 -- Frank Lorenzo, the pioneering, widely vilified chairman of Continental Airlines, today agreed to step down in return for a $30 million payment, saying the airline was better off without him.

Scandinavian Airlines System (SAS), which already owns 9.9 percent of Continental's parent company, will buy most of Lorenzo's stake, paying more than three times the market price of the stock before the deal was announced.

As part of the agreement, Lorenzo promised that he would not work in the airline industry or for any Continental competitor for seven years.

Although SAS said it will not control Continental, its president is considering an offer to become the company's "nonexecutive" chairman. Lorenzo will be replaced by Hollis L. Harris, the current president of Delta Airlines. Because SAS is a foreign airline, the deal must be approved by the Transportation Department.

Lorenzo said he was making the break after 18 stormy years in the industry because his personal reputation had become a major burden for Continental and was preventing the airline from achieving its potential.

"I have been a lightning rod for many of the attacks that the company has taken in the process of making changes that have been required," Lorenzo told reporters in New York.

Under the complex arrangement, part of the payment to Lorenzo places a value of $14 a share on Continental's stock while another part values it at $18 a share. Continental's stock closed Wednesday at $4.50 a share on the American Stock Exchange before the announcement, and it rose to $6.25 today on the news.

Lorenzo said a major factor in his decision to step down was the negative fallout from his experience with Eastern Air Lines, which he headed until a bankruptcy court seized control from him this spring and appointed a trustee to run the company.

Lorenzo said that "some of the heat from the past, from the Eastern situation," had made him a "symbol" whose presence at Continental was counterproductive. Lorenzo's aggressive dealmaking and tough management practices in the airline industry have made him a bitter foe of organized labor, which welcomed his departure.

"Lorenzo, through his scorched-earth approach to labor and to other business dealings, has caused more disruption, rancor and hardship in the industry than any other individual in recent airline history," the Air Line Pilots Association (ALPA), one of Lorenzo's biggest enemies, said in a prepared statement.

"From the beginning, ALPA has maintained that Lorenzo is not fit to successfully operate an airline. His inability to sustain Eastern Air Lines and Continental Airlines as viable, profitable operations in the midst of the biggest airline boom in history proves the point. We believe that the industry and the traveling public will be better served and safer with him gone," it said.

Lorenzo antagonized labor through such techniques as placing airlines in bankruptcy proceedings in order to gain leverage to reduce salaries and make layoffs. His aggressive cost-cutting drew criticism for appearing to lead to worsened service, and his reliance on risky "junk bonds" to finance many of his acquisitions has been viewed by some as irresponsible.

Lorenzo will remain a director of Continental and will keep stock options allowing him to purchase 783,333 shares at an average price of about $6 a share.

Harris, who described himself at the briefing as "a people person," said he believed Continental was "well-positioned for growth in the future."

Robert J. Joedicke, an airline specialist and advisory director at Lehman Brothers, said Lorenzo's departure was likely to usher in "a new era for Continental that would be a little more friendly than confrontational." While acknowledging that Lorenzo had alienated labor, Joedicke said Lorenzo's "strong approach, his not giving in to unions, is certainly one of the factors that makes Continental a low-cost operator." Joedicke also defended the deal for Lorenzo's shares, saying, "It's not unusual to pay a premium for a block of stock."

Lorenzo, asked by a reporter why he should receive such a high price for his shares when other investors in Continental had suffered from a sharp decline in the stock's value this year, said that by selling now he was "being denied the upside {potential} here, and our shareholders are not."

Under the deal, SAS will pay a total of about $52 million to boost its interest in the airline's parent company, Continental Airlines Holdings Inc., to 16.8 percent of the equity and 18.4 percent of the voting stock of the corporation. About $10 million of the money will go into Continental, while $29.9 million will go to Lorenzo and the rest will go to two of his partners.

Jan Carlzon, president and chief executive of SAS, said his company viewed the deal as a good investment, and he defended Lorenzo. "Frank has got a reputation that he doesn't deserve," said Carlzon.