The federal government has decided to drop its ownership claim to a small tract near the Alexandria waterfront, an action officials said yesterday could signal the end of legal entanglements initiated by the government that have blocked waterfront development in the city for years.

In exchange for dropping its claim against Development Resources, Inc., which owns 2.2 acres called the Bogle tract a block from the Potomac River, the government obtained permanent and unprecedented restrictions on the use of the land by its owners, company and government officials agreed.

Those restrictions, made a permanent part of the deed to the land, limit the height of buildings there to 62 feet, permit only low-density development and prohibit industrial uses. A 6-foot-high brick wall must be built around the southern end of the property to shield a parking lot from public view.

The agreement about the future use of the Bogle tract and a proposal for an agreement with the owners of 153 town houses whose titles to their homes are jeopardized by the government's interest in the waterfront reflect the longstanding desire by federal officials to limit building height along the waterfront.

In 1973, the U.S. government filed suit in federal court claiming title to the waterfront and citing an obscure 1791 high water mark as its justification. That suit has blocked development by casting doubt on the ownership of about 50 acres.

Since then, city zoning codes have been charged, plans for high-rise developments have been abandoned and city proposals for the area are similar in many respects to what federal officials want.

Alexandria Mayor Charles E. Beatley Jr. said of the agreement over the Bogley tract: "I think it's just great. It shows we may be getting close to ending this impasse."

Greg Fazakerley, president of the firm that will develop the Bogle tract, said a $6.5 million low-rise office complex is planned for the site.

The proposed agreement with the town house owners was announced yesterday by the Interior Department. The government would agree that it will never attempt to take title to the homes, and the homeowners would agree to place in their deeds permanent restrictions against increasing the height or density of the buildings, according to Interior Department attorney Tony Kushnir.

City and federal officials are preparing to meet this spring to work out a common plan for the waterfront including parkland, open space and bike paths.