Deion Sanders, one of the most charismatic athletes in sports and one of the greatest cornerbacks in National Football League history, retired from football yesterday as part of an agreement with the Washington Redskins.

Sanders, who turns 34 next month, forfeited a portion of the $8 million signing bonus in his seven-year, $56 million contract and agreed not to play for another NFL team. The club still owed Sanders $2.5 million of the signing bonus, and sources close to the situation said Sanders agreed to forfeit about $500,000 of that.

The negotiations yesterday between the Redskins, Sanders and Sanders's agent, Eugene Parker, were amicable, sources said, even after Sanders had expressed displeasure with the team during the offseason while pursuing a baseball comeback.

"I told everybody before, I thought we'd be a better football team with Deion. But he chose not to play," Redskins Coach Marty Schottenheimer said last night as he left Redskins Park with owner Daniel Snyder. "I harbor no ill will to Deion at all. These are business decisions that are made. He didn't want to play anymore, and it's time for us to move on."

Snyder declined to comment. Sanders was traveling to his home near Dallas last night and was not available to comment. Parker did not return a telephone message. Sanders told the Redskins he did not want to continue playing because his performance last season was not up to his standards, sources said.

The Redskins received a copy of Sanders's retirement letter to NFL Commissioner Paul Tagliabue just after 6:30 p.m. The club plans to place him on the reserve-retired list, which prevents him from playing for another NFL team.

Sanders's retirement clears more than $3.5 million of salary cap space for the Redskins for the upcoming season, which probably will enable the club to sign a veteran reserve quarterback, a veteran starting free safety and other players.

By retiring, Sanders forfeited this season's $3.5 million salary. He will count $1.14 million against the Redskins' salary cap this season -- a prorated portion of his original signing bonus -- and will count about $5.2 million against the team's salary cap during the 2002 season. If he had not agreed to return some of his signing bonus, he would have cost approximately $5.7 million against the 2002 salary cap.

By negotiating a settlement, Sanders and the Redskins avoided what could have been a nasty battle. If Sanders had retired without an agreement with the Redskins, the team likely would have tried to force him through arbitration to return up to $6.8 million of the bonus.

Sanders played 12 NFL seasons. He was selected to seven Pro Bowls and won Super Bowl titles with the San Francisco 49ers and Dallas Cowboys. He signed with the Redskins in June 2000 after being released by the Cowboys in a salary cap maneuver and helped Washington's defense to rank second in the NFL against the pass, and fourth overall, last season.

But he was not the Sanders of old. Opponents threw passes toward him instead of toward second-year cornerback Champ Bailey, and Sanders stopped returning punts midway through the season. Still, the Redskins probably would have welcomed him back had Sanders reported to training camp Sunday in Carlisle, Pa., with a conciliatory attitude.

Taking advantage of a clause in his contract, Sanders tried to return to baseball this summer. He batted .459 in 19 games at Louisville, the Cincinnati Reds' Class AAA affiliate, in April. He went 3 for 3 with a home run May 1 for the Reds in his first major league game since 1997. But he slumped from there and was hitting .173 in 32 games when he was released by Cincinnati last month. He was signed by the Toronto Blue Jays and batted .252 in 25 games for their Class AAA affiliate, Syracuse, before leaving the minor league team following Thursday night's game. He hit a homer in his next-to-last at-bat.

As he said his goodbyes in the SkyChiefs' clubhouse Thursday night, Sanders told reporters: "I've got to really get my head together and figure out what I'm going to do and what I want to accomplish. . . . I want to prepare myself for whatever happens. You never know."

Sanders had criticized Schottenheimer in February for failing to keep him informed about the events that led to former defensive coordinator Ray Rhodes's departure from the Redskins. He had said this offseason he did not trust Schottenheimer.

Sanders's departure may clear the way for Darrell Green to return to the Redskins' starting lineup in his 19th -- and perhaps final -- season with the franchise. Green stepped aside last season to accommodate Sanders's arrival. The Redskins used their second-round pick in the NFL college draft in April on a cornerback, Fred Smoot, and signed cornerback Donovan Greer as a free agent.