A punch-card voting system that was tested successfully in the District of Columbia's May 1 special election was chosen yesterday as the city's permanent balloting system.

The Board of Elections and Ethics voted to buy balloting equipment and a related computer system from Data-vote, a San Francisco-based division of the Diamond International Corp.

Congress has appropriated $650,000 for the city to buy automated voting equipment. However, the actual price is subject to negotiation between the company and the city's Department of General Services, board officials said.

Datavote equipment was used May 1 to cast and count ballots in races to fill two seats on the City Council and one on the school board.

It produced a complete printout, with the final count of 51,000 ballots cast that day, only two hours and 32 minutes after the polls had closed - a record in the brief but troubleplagued history of D.C. elections.

The city currently owns 30 devices, with the trade name of Valtec, that scan paper ballots that have been marked in pencil by voters.

These devices, which will be discarded, were used in last September's mayoral primary election in which the results were not known for several days. Election officials said at the time that the devices failed to "read" many of the ballots, and they had to be counted tediously by hand.

Even if the Valtec system had been chosen by the board, officials said the old machines would have been replaced.

The new Datavote system uses small cards that are punched when voters depress a handle that looks like an office stapling machine.

After the voting is completed, the punched ballots are carried to a central station, where they are fed into another machine and tallied by a computer.

Mary S. Rodgers, elections administrator for the board, said 1,738 of the punching devices were used May 1 at the city's 137 polling places.

Over the years, the city has tested nine different balloting systems. James L. Denson, who recommended the choice of Datavote, said it would lead to "a complete revitalization and modernization of a system that [now] is as antiquated as any in the country."

Jeanus L. Parks Jr., the board's acting chairman, who joined Denson in yesterday's 2-to-0 vote, said the congressional appropriation would expire unless funds for the devices are committed by Sept. 30.

Lillie Fitzgerald, the board's administrative officer, said she expected the voting machinery to be available for the school board election Nov. 6, which also may see the first use of the city's newly enacted initiative, referendum and recall process.

The system includes full computerization of the board's voting registration and campaign finance records, which now are kept in card files and traditional office folders.