SAN FRANCISCO — Intel Corp. will pay more than $1.2 billion to make peace with Advanced Micro Devices as the companies whose microprocessors run nearly all personal computers finally found common ground in a bitter and colorful dispute that caused international antitrust trouble for Intel.

The settlement announced Thursday sent AMD stock soaring and ended AMD’s 4-year-old lawsuit that accused Intel of abusing its dominance of the chip market to keep a lid on AMD’s share. Intel controls about 80 percent of the microprocessor market; AMD has about 20 percent.

According to the lawsuit, Intel penalized computer makers for using AMD’s chips or offered them financial incentives — payments that a Toshiba Corp. manager likened to “cocaine.” Executives from Gateway complained that Intel’s threats of retaliation for working with AMD beat them “into guacamole.”

Intel has defended its practices, saying it simply offered rebates to big customers, which allowed them to pass lower PC prices to consumers. A microprocessor can account for 15 to 20 percent of the cost of a computer, according to Martin Reynolds, a vice president with the Gartner Inc. research firm.

Despite Intel’s stance that it did nothing wrong, the AMD lawsuit, which was scheduled to go to trial in March in Delaware, was one of Intel’s biggest headaches. Settling the case removes the possibility that Intel would be on the hook for even more if it lost at trial, Intel CEO Paul Otellini said.

“While it pains me to write a check at any time, in this case I think it was a practical settlement,” Otellini said on a call with analysts. Intel shares fell 16 cents, 0.8 percent, to close Thursday at $19.68.

The settlement will help AMD reduce its $3.7 billion in debt. Its shares jumped $1.16, or 22 percent, to close at $6.48. But even before the settlement, AMD’s complaints had their desired effect: Antitrust regulators in several countries have filed cases against Intel based on AMD’s accusations—cases that will continue despite the settlement.

The U. S. Federal Trade Commission is investigating Intel, and regulators in Europe have fined Intel a record $1.45 billion. Intel has paid the fine but is appealing it.

European Union spokesman Jonathan Todd said Thursday that the European Commission “takes note” of Intel’s settlement with AMD but added that it does not change Intel’s duty to comply with European antitrust law.

Regulators in Korea have fined Intel $18.6 million—Intel is appealing that as well — and last week New York Attorney General Andrew M. Cuomo filed a lawsuit in federal court accusing Intel of using “illegal threats and collusion” to dominate the chip market “with an iron fist.”

In 2005, Japan’s Fair Trade Commission found that Intel violated antitrust rules there. Intel accepted that ruling without admitting wrongdoing.

Intel can easily absorb the latest penalty.

The company made enough money in just the first nine months of this year to pay the European fine and the AMD settlement and still have nearly $1 billion left over. Since AMD sued Intel in 2005, Intel’s profit has totaled $28 billion.

It’s not clear how much Intel’s tactics will change under Thursday’s settlement pact. Intel agreed to “abide by a set of business practice provisions,” and AMD said the changes resolve its concerns “to a great extent.” But Intel said that as part of the deal it will refrain from giving financial incentives to companies that limit their use of AMD chips, which the company said it wasn’t doing.

Intel said that with the $1.25 billion settlement, its spending this quarter will now be $4.2 billion rather than the $2.9 billion it had previously forecast. But it also expects its income tax rate to be 20 percent, not 26 percent, because it says legal settlements are tax deductible.