NEWPORT BEACH — Citing a reluctance to comply with an outsourcing proposal that would cut his staff, the city attorney announced Tuesday he was parting ways with the city.

Both David Hunt and the City Council mutually agreed to the departure, effective Sept. 23 or until a successor is found, officials said.

Hunt, who was asked by the council to create an outsourcing plan to save costs, could have been forced to lay off three of his six in-house attorneys. The move could save the city up to $566,000 annually, according to a staff report.

"Their direction is a perfectly valid choice," Hunt said. "It's simply not a model I care to execute."

Officials sought to downplay any internal discord.

"This is a decision amongst reasonable people," said Mayor Mike Henn, "and should not reflect in any way negatively of the work in the office of the city attorney."

The six-month probationary period in Hunt's contract ends June 30. According to the agreement, if the City Council decided to fire him before then, without giving cause, he would receive three months severance pay. At the council meeting Tuesday, he said that he will get three months' severance.

Hunt waived his right to sue the city, in exchange for his contract's severance provisions. His annual salary was $220,000.

Hunt has had a rocky two and a half years as Newport Beach's chief attorney. He was arrested on suspicion of domestic abuse in March 2010 but was never charged, and he has been under a sort of probation since his contract was renewed in January 2011.

Furthermore, the city attorney's considerable budget has come under scrutiny in recent years, as Newport Beach spends more defending against litigation, including cases about the city's controversial group-homes ordinance.

In other matters from Tuesday's meeting:

Newport Beach lifeguards will pay more toward their pension costs. New guard employees will have a less generous retirement plan under an amendment to their contract, which the council approved. The members voted 6 to 1, with Councilman Steve Rosansky dissenting.

The council voted 5 to 2 to overturn the Planning Commission's denial of a request by 3-Thirty-3 Waterfront restaurant to extend its outdoor patio hours. Council members Keith Curry and Nancy Gardner voted against the restaurant's plans.

In a move to strengthen the city's position in upcoming fire and police union negotiations, the council approved Tuesday a contract with a labor negotiator.