International Telephone and Telegraph Corp. has completed a new three-year review of questionable overseas payments by the company and will file a long-awaited report on that probe this week, ITT's chairman and chief executive, Rand V. Araskog, announced today.

The report is likely to end seven years of controversy between the company and the Securities and Exchange Commission over questionable payments ITT made to government employes and to ITT customers in at least 10 countries. The report will be filed in federal court in Washington as part of a review required by a consent agreement ITT signed with the SEC.

Araskog made the announcement here during ITT's annual stockholders meeting. In response to reporters' questions after the meeting, however, Araskog said the ITT board of directors already had implemented changes in corporate procedure recommended by Yale Law School Dean Harry H. Wellington, who was brought in to conduct the probe.

Personnel changes also have been made in response to the investigation, Araskog said. "Anyone who has been caught in violation is no longer with us," he added.

On other matters, Araskog announced that ITT and the French Socialist government have begun final negotiations on nationalizing major ITT telecommunications equipment manufacturing and research facilities in France.

The French Ministry of Industry and ITT have agreed to a schedule under which the negotiations are to produce a preliminary agreement by June 30 and a final takeover pact by July 31, Araskog said. The ITT investment in France totaled $37.7 million as of March 31, although the assets could be worth 10 times that amount in the open market.

Araskog also used the annual meeting to denounce the January settlement of the Justice Department's antitrust suit against American Telephone & Telegraph Co. Under that settlement, AT&T has agreed to divest itself of 22 local phone companies.

"To me this was not a settlement; it was an unintended collapse of the purpose of the antitrust suit," Araskog told stockholders. "The Department of Justice simply did not understand the problem and was too quick in solving it. It's no wonder there is a major outcry against the settlement. It's no wonder AT&T is squealing like a stuck pig to protect the lopsided deal."

After the meeting, Araskog told reporters that the settlement terms, if implemented, will stifle competition in the telephone equipment business and result in sharply higher consumer telephone rates. "I don't think anyone appreciates the extent that local rates will go up in a brief period of time," he said.

ITT, which is a major manufacturer of telephone equipment and the largest overseas Yellow Pages publisher, is actively supporting House legislation designed to reshape the settlement. In particular, the company is concerned about AT&T keeping its hardware and massive Yellow Pages operations under the corporate umbrella, rather than spinning them off to the local firms.

ITT is part of a Washington lobbying coalition fighting the settlement pact and has filed comments critical of its terms.

Meanwhile, the company also announced first-quarter profits of $163 million ($1.10 a share), down from $184 million ($1.25) in 1981. Sales rose to $4.11 billion from $3.95 billion. The 1981 figure includes a one-time $17.8 million charge stemming from the settlement of a federal tax matter.

In addition, the company reported that revenues from its insurance and finance subsidiaries rose slightly from $1.42 billion in the 1981 first quarter to $1.46 billion, although profits fell sharply to $68 million during the 1982 period from $104.06 million in 1981.

Araskog called the results "better than we anticipated at the end of 1981," and said he expects 1982 year-end results roughly to match the company's profit of $676.8 million recorded last year.

Araskog also announced that the company's ITT Rayonier Inc. subsidiary, a paper and wood products company, is "not for sale," although a "serious buyer" had approached ITT and offered an "extremely attractive" price. But high interest rates and overall economic conditions caused the deal to fall through.