Is it permissible to relinquish a valuable item – lent by the questioner to a woman with whom he had a relationship – to avert temptation (fitna); and will he be rewarded for that?

You must sincerely repent from the forbidden relationship, cure yourself from attachment to her, and strive to marry her if possible. Occupy your time with what benefits you, such as knowledge and good deeds. It is permissible for you to retrieve what you lent her through a means that does not lead to haram, such as asking your sister to speak to her, or sending it with one of the children.