The head of the private Russian military force Wagner said Saturday he has ordered his mercenaries to halt their march on Moscow and retreat to their field camps in Ukraine to avoid shedding Russian blood.

The announcement from Yevgeny Prigozhin appeared to defuse a dramatically escalating crisis that represented the most significant challenge to President Putin’s leadership in his more than two decades in power.

Moscow had braced for the arrival of a private army led by the rebellious mercenary commander by erecting checkpoints with armored vehicles and troops on its southern edge. Red Square was shut down, and the mayor urged motorists to stay off some roads.

Mr. Prigozhin said that while his men were just 120 miles from Moscow, he decided to turn them back to avoid “shedding Russian blood.”

He didn’t say whether Moscow has responded to his demand to oust the Defense minister, Sergei Shoigu. There was no immediate comment from the Kremlin.

The announcement followed a statement from the office of the Belarusian president, Alexander Lukashenko, saying that he had negotiated a deal with Mr. Prigozhin after discussing the issue with Putin. 

Mr. Prigozhin agreed to halt the advance in a proposed settlement that contains security guarantees for Wagner troops, Mr. Lukashenko’s office said. It didn’t elaborate.

Mr. Putin had vowed harsh consequences for organizers of the armed uprising led by his onetime protege, who brought his forces out of Ukraine, seized a key military facility in southern Russia and advanced toward Moscow.

In a televised speech to the nation, Mr. Putin called the rebellion a “betrayal” and “treason.”

“All those who prepared the rebellion will suffer inevitable punishment,” Mr. Putin said. “The armed forces and other government agencies have received the necessary orders.”