Gov. Parris N. Glendening said yesterday that he would end 50 years of acrimonious debate over the most divisive highway project in the Washington region by rejecting construction of an intercounty connector across the Maryland suburbs.

He ordered the state immediately to sell off $25 million in property acquired for one of the proposed routes and said officials would move to dedicate the right-of-way along the more southern alignment for parkland and a future transit line.

The ICC, he said, "would be an environmental disaster, and I will not do it." In making the long-awaited announcement at an afternoon news conference, he said: "It is a proposal that has fractured our communities. It has pitted neighbor against neighbor. And it has created political gridlock while traffic gridlock has only worsened."

Glendening's decision, reversing the recommendation by a transportation task force he appointed last year, represents a resounding setback for the business community, which has aggressively lobbied for a highway linking Interstates 270 and 95, which it considered critical to the area's economic vitality.

But environmental activists, who have fought the proposal for just as long, were reluctant to cheer the announcement since the governor said he would still press ahead with the development of two new limited-access parkways at each end of the proposed ICC route.

The western segment would connect I-370 in Gaithersburg and northern Georgia Avenue, while the eastern segment would connect Route 29 and Route 1 in the Laurel area. Together, these four-lane highways would traverse nearly 10 miles of the 18-mile route planned for the ICC but would steer clear of the Paint Branch and Northwest Branch rivers, which Glendening said he was determined to protect. Officials said that these proposals would likely be submitted for further federal environmental review and that construction would not be expected to begin for at least five years.

Glendening said the federal government remains adamantly opposed to approving the construction of the road's middle portion.

"For us to continue wasting taxpayers' dollars on another decade of studies makes absolutely no sense to me," he said. More than $60 million has already been spent studying the ICC. The 18-mile connector was estimated to cost $1 billion.

Explaining his decision to abandon the project, Glendening said studies had shown the highway would do little to ease traffic on the Capital Beltway and other area roads while distracting the state from tackling congestion now. He said he would ask the legislature in January for $200 million to improve intersections, build interchanges and widen roads in Montgomery and Prince George's counties. Last year, he initiated a $50 million program to upgrade 14 intersections in the same region.

The increased spending was dismissed as a paltry substitute for a connector by John T. Schwieters, chairman of the Greater Washington Board of Trade, which strongly supports the ICC. "He totally ignored the wishes of the majority of people," Schwieters said, citing recent polls commissioned by business leaders.

That discouragement was echoed in sharp criticism from the executives of both counties, who have said the highway is vital to the health of their respective high-technology corridors because it would improve access to Baltimore, Annapolis and Baltimore-Washington International Airport.

"It's a real slap in the face to the people who've been stuck in traffic for years," said Montgomery County Executive Douglas M. Duncan (D), who has consistently lobbied for the connector. "At some point we're going to have an eruption of anger."

Prince George's County Executive Wayne K. Curry (D) called the decision to drop the ICC a "disappointing change of direction," adding that the other transportation improvements unveiled yesterday were insufficient.

But in those two counties, where the majority of both councils have opposed the highway proposal, members hailed Glendening's decision. Montgomery County Council member Nancy Dacek (R-Upcounty) jested that she and her colleagues were ready to sing "Ding Dong the Witch is Dead" to celebrate the roadway's demise.

And Prince George's County Council member Peter A. Shapiro (D-Brentwood) called the governor's decision "a victory for smart growth."

Shapiro said: "The idea of building a billion-dollar road to shave off a few minutes on a trip to BWI [airport] never justified destroying . . . communities. There are better ways to do transportation."

No such praise was forthcoming from environmentalists, however, who warned that the two highway legs that Glendening proposed yesterday could be connected by improvements to Norbeck Road and Route 198 to form what Greg Smith, coordinator of the Campaign to Stop the ICC, called "ICC light." He warned that the construction of those roadways still would significantly damage parkland and wildlife habitats.

But Stuart Rochester, a longtime opponent of the highway, called the governor's determination "a Solomonic decision" that balanced environmental and economic considerations while ending the uncertainty that had plagued residents for years.

The announcement yesterday marked the latest chapter in Glendening's turbulent relationship with the highway.

As Prince George's County executive and then governor, he had been a longtime backer of the connector.

But early in his reelection last year, Glendening abandoned his previous position, saying that environmental concerns had undercut his enthusiasm for the project. He suggested that alternatives be identified to relieve increasing traffic congestion.

While that reversal delighted environmental activists and mobilized them in support of his campaign, it outraged the business community and further alienated many executives.

Then, less than a month before the election, the governor told a prominent group of business executives in a private meeting that he would support a new east-west highway on the condition it would be a heavily landscaped parkway with few interchanges.

Ultimately, a similar proposal emerged this summer from the year-long deliberations of his appointed Transportation Solutions Group.

A majority of committee members recommended the state build a scaled-down, four-lane connector and that it charge tolls set higher at rush hour to discourage congestion. But several members remained concerned that even a limited road might not pass environmental muster.

Staff writers Daniel LeDuc, Manuel Perez-Rivas and Jackie Spinner contributed to this report.