Gov. Pete Wilson on Saturday signed over the state's half of a $500 million deal to buy the Headwaters Forest, sparing the world's largest privately held stand of ancient redwoods from the logger's ax.

"I am convinced that what we are doing will stand the test of time and nature, knock on wood," said Wilson, who signed the bill at a demonstration forest created by timber lobbyists at the state fairgrounds.Under the agreement that was widely condemned by environmentalists, Pacific Lumber Co. agreed to sell the 7,500-acre Headwaters Forest, at the heart of which lies 4,000 acres of pristine, primeval redwoods.

A nature preserve will be created once federal and state regulators approve the deal.

Twelve smaller "lesser cathedral" groves ancient redwoods will either be purchased or set aside.

"To those who care about the trees, this is the best we can get right now," said Sen. Dianne Feinstein, who helped broker the deal. "The Headwaters Forest forever. That is done."