Embattled press baron Conrad Black has struck a deal with Britain's Press Holdings International that would strip him of his newspaper empire.

Under the deal, announced Sunday, Press Holdings International would take over Black's controlling interest in Hollinger Inc. (HLGc.TO), the Toronto-based parent company of newspaper publisher Hollinger International Inc. (HLR).

News of the agreement comes just a day after Hollinger International said it was removing Black as chairman and suing him to recover more than $200 million the company claims was improperly diverted to him, an associate and entities he controls.

Press Holdings International's offer for Hollinger Inc. would value the company at $326 million, plus the assumption of $140 million in debt. Press Holdings said in a statement Sunday that it would circulate the offer to shareholders within 10 days.

Hollinger Inc. has a controlling interest in Hollinger International, a Chicago-based company that owns The Daily Telegraph of London, the Chicago Sun-Times and The Jerusalem Post. Hollinger International said it was evaluating the offer.

Press Holdings is controlled by brothers David and Frederick Barclay, and owns several newspapers in Britain, including The Scotsman, as well as The Ritz hotel in London.

The deal, if it goes through, would mark the exit of one of the newspaper industry's more flamboyant figures. Black's ownership of The Daily Telegraph has helped make him a major figure in business and social circles in England, where he holds the title Lord Black of Crossharbour.

In a statement Sunday, Black said it would be "distressing" to part with the newspapers, "but these fine titles must not be hobbled any longer by the current controversies and financial uncertainty."

In a letter to the board of Hollinger International, David Barclay said the sale of Hollinger Inc. should end the controversy, which he said was "significantly harming the public image and stock price of Hollinger International and undermining its credibility in the financial markets."

Press Holdings said it had agreed with Black to buy his controlling interest in Hollinger Inc. from Ravelston Corp., a privately held company that Black controls. Ravelston owns 78 percent of Hollinger Inc., which has 70 percent of the voting rights of Hollinger International.

The proposed deal is subject to Canadian regulatory approval. A Press Holdings spokeswoman did not immediately return a call for comment.

In November, Black was forced to give up his post as chief executive of Hollinger International after an internal review by a special committee found that $32 million in unauthorized payments were made to Black and some of his senior deputies.