Tyco International Ltd. agreed to pay $2.98 billion to settle investor lawsuits accusing it of inflating revenue, clearing the way for a split into three companies.

Tyco said it will take a charge in the current quarter for the full amount, the fourth-largest securities-fraud settlement in American history and the largest by a single company. The accord comes as Pembroke, Bermuda-based Tyco prepares to dismantle the company built through acquisition by former chief executive officer L. Dennis Kozlowski.

“The breakup is going to happen,” the chief investment officer of New York-based Matrix Asset Advisors Inc., which owned about 1.59 million Tyco shares at the end of March, David Katz, said. “The company has basically moved along and is clearing each milestone.”

Tyco, the world’s biggest maker of electronic connectors and security systems, entered into the settlement to resolve securitiesfraud suits alleging the company overstated its income by $5.8 billion during the tenure of the nowjailed Kozlowski, according to a filing with the U.S. Securities and Exchange Commission. The settlement still requires court approval.

Tyco shares rose as much as 51 cents, or 1.6%, in New York Stock Exchange composite trading after the settlement was announced. They rose 19 cents to $32.38 at 4:10 p.m. The shares have risen 17% over the last 12 months.

“With this settlement we are taking an important step to resolve our most significant remaining legacy legal matter,” the chief executive officer of Tyco, Ed Breen, said in a statement. “Our balance sheet and cash flow remain strong and will allow us to readily absorb these costs while removing much of the uncertainty around legacy legal matters.”

Investors and analysts, including Standard & Poor’s in 2004, predicted the company might have to pay as much as $4 billion to resolve the case.

“While the charge is higher than many investors likely expected, the settlement lifts a major overhang dating back to ’03,” a Credit Suisse analyst, Nicole Parent, wrote in a report issued yesterday.

Ms. Parent, who has a “neutral” rating on Tyco shares, had forecast a settlement of $1 billion to $1.5 billion.

“We’d note, however, that the liability has been an unknown for several years and it is a positive to see resolution prior to the breakup,” Ms. Parent added.

Kozlowski and former chief financial officer Mark Swartz are serving as long as 25 years in New York State prison for stealing more than $150 million in unauthorized bonuses and defrauding Tyco shareholders of millions more.

Investors alleged in their suits that the two also orchestrated a scheme to manipulate the company’s earnings and defraud shareholders. Kozlowski was forced to step down in 2002. Tyco agreed in April 2006 to pay $50 million to settle SEC claims over flawed accounting.

Mr. Breen restated results and tightened accounting rules after Kozlowski was ousted. The SEC alleged that Tyco inflated operating income by $567 million through its ADT security unit. It also claimed the company inflated revenue by $500 million through improper acquisitions accounting during Kozlowski’s tenure.

As part of yesterday’s settlement, shareholders are handing over to Tyco their claims against Kozlowski and Swartz in exchange for 50% of whatever the company recovers from the former executives.

Mr. Breen told investors May 8 that Tyco officials are still seeking to begin the company’s breakup by June 30.