The Alexandria City Council unanimously approved last night a long-awaited, sometimes bitterly contested agreement with the federal government over ownership of the city's valuable Potomac River waterfront.

The agreement goes a long way toward resolving the nearly decade-long dispute between the city and private landowners, environmentalists and the federal government over how the 1 1/2-mile-long, 39.5-acre area shall be used and who shall own it.

Compared to the tangled history of the land dispute, the terms of last night's agreement are seemingly straightforward: the city gets title to 15 acres of waterfront land, which it will leave as open park space. In return, the federal government agrees to drop its 135-year-old claim of ownership and gives the city control over waterfront development as long as it abides by a land-use plan drawn up in consultation with the National Park Service.

Although the federal government's lawsuit over the land dates only to 1973, the government's claim to the property goes all the way back to 1846, when Alexandria land donated to form the District of Columbia was given back to Virginia. At that time, the federal government put the new boundary between the District and Virginia at the river's 1791 high water mark. That, in effect, gave the federal government a hefty portion of newly filled-in land east of that mark -- the much disputed waterfront property.

The mounting expense of the whole disagreement and the costs of delayed development of the waterfront prodded both the government and the city to push for settlement this year. With last night's agreement, the first hurdle is cleared. The next major step will be agreement between the government and the private landowners along the waterfront.

Alexandria's 15 acres of the waterfront property are actually 5 distinct parcels, which includes Founders Park on the north end of the tract. Under terms of the agreement, Alexandria gives up any title to or interest in submerged land and agrees to use its 15 acres as public park areas, with some provisions for development of recreational facilities, including marinas, bike paths and paved plazas.

The city also must draw up a comprehensive zoning plan for the entire waterfront along the lines of the one proposed in the joint land use plan already agreed to with the park service. That plan reserves about 70 percent of the 39.5-acre waterfront tract for open space, which may include structures such as historical museums, performing arts facilities, marinas and outdoor restaurants.

Although most council members and city planning staff seemed pleased with the agreement last night, some citizen activists present were wary and criticized the council for refusing to disclose the specifics of the agreement until the council approved it.

The waterfront settlement now goes back to the Justice Department for the signature of an assistant attorney general, and then, finally, to federal court in Virginia where, if all goes well, it will end the law suit over the land that has been pending for eight years.