The New York Times and Judith Miller, a veteran reporter for the paper, reached an agreement yesterday that ended her 28-year career at the newspaper and capped more than two weeks of negotiations.

Letter to the Editor: Judith Miller's Farewell Ms. Miller went to jail this summer rather than reveal a confidential source in the C.I.A. leak case. But her release from jail 85 days later, after she agreed to testify before a grand jury, and persistent questions about her actions roiled long-simmering concerns about her in the newsroom and led to her departure.

Bill Keller, the executive editor, announced the move to the staff in a memorandum yesterday, saying, "In her 28 years at The Times, Judy participated in some great prize-winning journalism."

In a statement, Arthur Sulzberger Jr., publisher of The Times, said: "We are grateful to Judy for her significant personal sacrifice to defend an important journalistic principle," adding, "I respect her decision to retire from The Times and wish her well." Ms. Miller, 57, said in an interview that she was "very satisfied" with the agreement and described herself as a "free woman," free from what she called the "convent of The New York Times, a convent with its own theology and its own catechism."

The New York Times' long campaign in defense of reporter Judith Miller provoked substantial dissension within the newspaper and left it flat-footed as it tried to cover unfolding allegations that top aides in the Bush administration might have illegally exposed the identity of a CIA operative, the newspaper reported in today's editions.

The self-analysis by the Times makes it clear that — although Miller has previously been celebrated by the Times top management for going to jail to avoid naming a source — her reporting and decision not to cooperate with a federal grand jury were viewed skeptically by many of her colleagues.

When asked what she regretted about the newspaper's handling of the Miller matter, Jill Abramson, a managing editor, said: "The entire thing."

The group's First Amendment committee had narrowly voted to give Miller the prize for her dedication to protecting sources, but the full board has now voted to not accept that decision, based on its opinion that her entire career, and even her current actions in the Plame/CIA leak case, cast doubt on her credentials for this award.

The group's president, Jack El-Hai, posted an explanation on an internal list-serve yesterday, noting the opposition from the rank and file, and also mentioning two other reasons for the unanimous vote:

* "A feeling that Miller's career, taken as a whole, did not make her the best candidate for the award."

* "Divided opinions on the board over whether her recent actions merit the award."