The development rights for the former World Trade Center site have been divided up and a fast-track timetable for redevelopment has been set — backed by severe penalties for delays — after the Port Authority and developer Larry Silverstein finalized a deal yesterday.

After another round in a series of intense negotiations that extended right to the deadline, the board of the Port Authority yesterday approved the plan to redevelop the 16-acre site. The plan was bolstered in recent days when the federal, state, and city governments, along with the Port Authority, announced lease commitments for a quarter of the office space planned at ground zero.

Deputy Mayor Daniel Doctoroff said the agreement paves the way for “the single-most complex development project anywhere, ever.”

Governor Pataki said at a press conference that “the last major hurdle for the redevelopment of World Trade Center site has been overcome today.”

Until December, it was widely expected that Silverstein Properties, which leased the World Trade Center from the Port Authority six weeks before it collapsed, would build out and control 10 million square feet of commercial office space in five towers. Critics of that plan, including the Port Authority and the Bloomberg administration, said Mr. Silverstein would run out of money and default on his lease, leaving New Yorkers with a half-built site.

The city and Port Authority forced another round of negotiations, and in April the Port Authority, Silverstein Properties, the state, and the city struck a tentative deal under which Mr. Silverstein would relinquish control of about a third of the site.

Under that plan, which was finalized yesterday, Mr. Silverstein will build four office towers, but he will hand over the Freedom Tower to the Port Authority, along with the right to build Tower 5 on the site of the Deutsche Bank building.

The entire site would be built using Mr. Silverstein’s insurance proceeds from the September 11, 2001, attacks, $3.2 billion in tax-exempt Liberty Bonds, and conventional financing. Port Authority officials said the site for Tower 5 would likely be sold to a private developer, who could build a residential tower.

The April agreement allowed construction to proceed, but several major question marks remained, including concerns by the Port Authority about the financial viability of building the Freedom Tower, and by Mr. Silverstein, who sought added security in the form of guaranteed government leases.

Yesterday, the city announced that it would lease 600,000 square feet in Mr. Silverstein’s Tower 4 for $56.50 a square foot. Mayor Bloomberg, who was in Los Angeles yesterday, said that in 2013 the city would move its employees into the new tower and sell off the existing municipal buildings, which could be developed or converted into residential buildings. Mr. Silverstein can cancel the city’s lease for the next two years if he finds a tenant that would pay more.

The Port Authority also agreed to take 600,000 square feet of office space, or 12 floors, in Mr. Silverstein’s Tower 4, for $59 a square foot. Mr. Silverstein was reportedly seeking up to $78 a square foot.

Over the weekend, federal and state governments agreed to rent about 1 million square feet of space in the Freedom Tower from the Port Authority, at a price of $59 a square foot. Port Authority officials said yesterday that they would now begin marketing the remaining space — expected to be available in 2012 — to the private sector.

The agreement approved yesterday contains penalties to ensure that the project is built out and completed in a timely fashion.

If Mr. Silverstein does not complete his three towers within a timeframe of about four years, he will have to walk away from the project and forfeit his lease.

The Port Authority must pay Silverstein Properties $300,000 a day if it does not prepare the sites for Towers 3 and 4 by the end of 2007, and the site for Tower 2 by June 2008.

The developer will have a one-year grace period to live up to his commitment.

“The clock is starting,” the executive director of the Port Authority, Kenneth Ringler, said.

One major obstacle still facing redevelopment is a settlement of outstanding insurance claims. Silverstein Properties and the Port Authority are asking a state court to order four insurance companies to provide assurances that the latest agreement will not interfere in their payment of claims. Pending a settlement in a federal suit, the four companies could owe about $1 billion toward the rebuilding.