The General Services Administration, citing the existence of fire hazards and the high cost of improvements, announced yesterday that it is ending its lease on the old Lansburgh's department store downtown.

The move halts use of the building to store National Archives documents and throws into doubt plans to use part of the structure as a center for the arts and humanities.

The arts and humanitites center had been hailed as a means of helping restore life to the old downtown, and as a rare collaboration between the federal government and private arts and humanities organizations.

The reasons cited by GSA for terminating the lease were challenged last night by the building's owner, the Pennsylvania Avenue Development Corportation (PADC), which declared that since taking possession last year it "has taken necessary measures to provide safe tenant occupancy."

Asserting that it has fulfilled its obligations under the lease, PADC described the building as structurally sound and said that with relatively minor corrections it would meet D.C. fire code standards. Work to bring the building up to standard has already begun, PADC said in a statement.

GSA signed a 10-year lease with the former owner of the building in 1976 although GSA's fire prevention division called the decaying structure hazardous.

Some months ago, the National Archives proposed conversion of the vacant first floor and basement into an arts center until 1986 when the building was scheduled to be demolished.

On Aug. 2, GSA ordered the Archives to stop using the building pending a determination of whether it could be made fire-safe.

In announcing yesterday the decision by new GSA chief Rowland G. Freeman III to terminate the lease, a GSA spokesman said costs of complying with proper Archives standards would be $1.5 million.

PADC said last night it would keep working with representatives of the proposed arts center "until or unless" told of any change in its status.

While the National Archives "had been taking the lead" in developing the arts center proposal, it was "in a very tentative stage," and had not been approved at GSA's "higher echelons," the GSA spokesman said last night.

He added that "it is not appropriate" for the Archives to play a lead role since it will no longer be a tenant in the building. However, he said, the Archives "will assist" in making the transition to new leadership in the project. He said PADC would be informed of this.