PICASSO, when he heard of the plan, was 92 years old. He could not help but smile.

Perhaps in his mind's eye he saw all those famous pictures by the other famous artists -- those Pollocks, Braques and Duchamps, those Mondrians and Nolands -- being carted out of sight. Perhaps he smiled at the thought of the chaos he'd engendered. In April, 1980, workmen in white gloves -- paying homage to Picasso's memory -- will begin to empty New York's Museum of Modern Art.

The statues in the landscaped garden beside 54th Street will all be rolled away. The galleries will close; their white walls will be stripped. One by one the paintings there -- by van Gogh, Munch and Klee, by Rothko and de Kooning, Hopper and O'Keeffe -- will be taken from display. Picassos will replace them all. When, after three frenetic weeks, the Museum of Modern Art reopens to the public, it will house a one-man show.

"Pablo Picasso: A Retrospective" will open on May 2 and run through mid-September. With its 700 objects, its unfamiliar masterworks, its million-dollar budget, its loans from other museums and private collectors, from Prague and Leningrad, from Paris and Moscow, it will be a solo show as lavish, as costly and exhausting as any ever seen.

Who else except Picasso could sustain such an effort, commandeer a whole museum, or even temporarily brush aside Matisse and Cezanne? Everything about the man -- his protean shifts of style, his influence on others, his passion, his invention and now his retrospective -- seems exaggerated, grand. "A Picasso retrospective" says Richard Oldenberg, the museum's director, "is something like a group show within a single mind."

One can only guess at the choreographed confusion that will reign at the museum before the show goes on the walls.

The collection of the Modern -- 3,500 paintings and sculptures, 8,000 movies, 20,000 photographs, some 40,000 prints -- is not all that large, and no more than a fifth of it is on view at one time, but taking that fifth down is sure to be a hassle. Extra workmen will be hired. The pictures will be checked for condition, wrapped with care, and then rolled to the storerooms, to warehouses nearby or to other museums. The labels will be taken down (and saved), the walls patched and repainted. As soon as they are gone, hundreds of Picassos will begin moving in.

Think of the crowds they will attract; think of the work and danger that must be involved in shipping such a show; consider the insurance. The art indemnity program of the federal government will provide the coverage for the first $50 million, but the Picassos to be shown are worth much more than that. (Private policies will cover the remainder; their cost will not be all that large, for policies with $50 million deductible clauses are not that hard to get.) Admission tickets must be printed (their price has not yet been determined); opening parties must be planned. The exhibition's catalogue with its many color plates will include illustrations of every object shown. "You can see," says Richard Oldenburg, the director of the Modern, "that we have a lot to do."

"But we do it now, or never," says William S. Rubin, head of the Museum's department of painting and sculpture who, in collaboration with Dominique Bozo, the French Picasso Scholar, chose the objects for the show."This is our last chance.

"It's as if a window opened," Rubin said, "and it won't be open long. A Picasso retrospective as complete as this one never will be seen in America again."

A set of accidental factors -- in remarkable conjunction -- made the exhibition possible.

The Picasso retrospective appropriately celebrates the 50th anniversary of the Museum of Modern Art. "We only have enough room," says Oldenburg, "to exhibit here, at one time, perhaps 20 percent of our collection. It's a hell of a 20 percent, admittedly, but for every work on view here we have another work in storage and another out on loan. We never could have borrowed the Picassos that we're borrowing if, during the past half century, we had not accumulated lots of IOUs."

"Guernica," the huge work in which the master expressed his rage at Franco and the bloodshed of the Spanish Civil War, has been for many years on loan to the Museum of Modern Art. The date has not been set, but in accordance with the artist's wish, the painting soon will be returned to liberated Spain. The picture is so large and fragile that moving it is dangerous; it is, in fact, so delicate that it will not be reinstalled for the Picasso retrospective. Instead, the exhibition will be arranged around it. The show will no doubt give Americans their final opportunity to see the work in context, to bid "Guernica" goodbye.

The government of France soon will take possession of hundreds of Picasso's own Picassos, which, in lieu of death duties, have been accepted by the state. Though the division of the legacy -- which heir gets which painting, which objects go to France -- is not yet complete, the outlines of the settlement already are clear. In fact, selections from the state's share of that remarkable collection -- it is particularly rich in sculpture -- will go in view next month in Paris at the Grand Palais.

Eventually that treasure will be permanently installed in a new Picasso Museum in Paris, an institution set to open in 1981, the hundredth anniversary of the master's birth. The building has been chosen -- it is a 17th-century structure not far from the new Beaubourg museum in the Marais district on the Right Bank of the Seine -- but it is not yet ready. With the agreement of the French government and of Bozo, the new museum's director, some 150 objects chosen from that unfamiliar hoard will travel in December to the Walker Art Center in Minneapolis.After their display there, they will be exhibited for five months in the MOMA retrospective in New York.

"Once they've been installed in Paris, the objects from the legacy will not soon go out on loan again, except in dribs and drabs," said Rubin. "We have 90 Picassos in our own collection -- 'Les Demoiselles d'Avignon,' 'Three Musicians,' the 'Girl Before a Mirror,' the 'Guitar' of 1912 -- and we'd never lend them all. 'Guernica' is going to Spain. The Paris museum will open soon. This was our last chance."

Had Picasso left a will, had the Paris museum opened, had Franco survived longer, had the Museum of Modern Art been younger, the Picasso retrospective would never have come off. Museum curators, it's true, dream of retrospectives given to the major masters, to Rembrandt or Matisse, Titian or Velazquez, but such exhibits do not happen. They are too risky, too expensive. The Picasso show won't travel. Nor will its paintings, sculptures, drawings, collages and ceramics be seen together again.

Picasso was a hoarder. "Even when he lived in a millionaire's villa," remembers Rubin, "he seemed to be just camping there. He enjoyed Bohemian clutter." Picasso did not like throwing things away; he kept old hats, old menus, useful bits of string. He also kept Picassos.

He owned four houses in the south of France, and all were filled with art. At his death at 92 in 1973, Picasso left an estate valued -- officially -- at 1,251,673, 200 French frances or approximately $250 million. Included in his legacy were more than 45,000 works of art.

He'd made most of them himself. Included in his legacy were 1,355 Picasso sculptures, 1,876 Picasso paintings, 2,880 Picasso ceramics, more than 11,000 sketches and drawings, and some 27,000 Picasso prints. From these will be drawn 150 of the most important for the Walker and MOMA shows.

Of Picasso's many lovers, he married only two; of the four children who survived him, only one was born in wedlock. He did not leave a will. Sorting out the magnificent and stunning mess that he left behind him has required years. Even at this writing, with Picasso six years dead, the division of his legacy is not yet complete.

On an estate so valuable, the taxes due the state, of course, are astronomical. Rather than flood the market with thousands of Picassos, the government of France agreed to take its cut not in cash, but in works of art. "I'd guess," said Rubin, "that France took between 25 and 35 percent. They had the first crack at the legacy and, not surprisingly, they picked what they thought best. The sight of the room in Mougins where Picasso stored his art was unbelievable. It was a forest of sculpture. He'd made hundreds of Cubist constructions, and he didn't sell a single one. He gave a few away. He kept the rest himself."

Rubin says the show will be installed "chronologically and simply. We only have three weeks to clean out the museum and mount the exhibition. We do not have the time, nor the inclination, for a lavish installation. We'll avoid mauve walls. Visitors probably will enter from 54th Street. We'll use the garden as a lobby, and the lobby as a sculpture garden. Picasso's student work, his Blue and Rose Periods, his first experiments with Cubism, will be displayed on the first floor. On the second we'll show the work from 1908 through the 1920s. The major works he made between the 1930s and his death will be seen on the third floor."

"The exhibition will not be strictly chronological. One space will be given to Picasso's self-portraits. We'll devote another to the studies that he made for his 'Crucifixion.' A third special section will be given to his paraphrases of the Old Masters."

Not all of the Picassos that Boxo and Rubin wanted to include will be in the show. Some older Picassos in foreign collections are thought to be too fragile to travel to New York. Some important pictures -- for instance, the Pedro Manach portrait and the important "Family of Saltimbanques" in the National Gallery of Art's Chester Dale collection -- are not available for loan (though other National Gallery Picassos will be included in the show).

"We hoped for things we will not get," said Rubin, "but I'd guess our disappointments were only five percent.

"Enormous as it is, the show is just a sampling. Bozo and I chose the works together. The selection was less difficult than you might expect. The best Picassos somehow seem to recommend themselves."

"A number of our large abstract expressionist and newer pictures will be lent to the Brooklyn Museum," said Oldenburg. "The Beaubourg in Paris will borrow some of our Futurist pictures. Other works will go on loan to other institutions, and a number of our biggest stars -- van Gogh's 'Starry Night,' our Gauguins and our Cezannes -- will be placed on view nearby at the Metropolitan Museum of Art."