After an eight-year delay blamed on a shortage of city funds, the District government is preparing to open the final stretch of the Center Leg Freeway (I-395) between Massachusetts and New York avenues north of the Capitol, ending one of Washington's most protracted highway controversies.

The $ 36.5 million freeway extension, left unfinished when funds ran out in 1978, is scheduled to open in two stages. The two southbound lanes are targeted to open Monday. The two northbound lanes are expected to be completed by the end of January.

The project, which consists mainly of a 1,250-foot tunnel, will extend the Center Leg Freeway from Massachusetts Avenue between Second and Third streets NW to New York Avenue at Fourth Street NW. City officials say the extension will reduce rush-hour delays for thousands of commuters.

The Center Leg was planned as a key north-south route in an elaborate freeway network. It would have formed the midsection of an Inner Loop around the city. But most of the proposals, including a plan to extend the Center Leg farther north, were dropped amid antihighway protests in the 1960s and 1970s.

Today, the Center Leg is viewed by city officials mainly as a link between the Southwest-Southeast Freeway and New York Avenue (Rte. 50), a heavily used road that feeds traffic to the Baltimore-Washington Parkway, Route 1 and I-95. The Center Leg allows traffic to bypass the Mall and the Capitol Hill area.

The Center Leg's main section, a $ 73 million, federally financed highway that tunnels beneath the Mall between the Southwest-Southeast Freeway and Massachusets Avenue -- opened in 1973 and is used by nearly 87,000 cars and trucks a day.

By 1975, work had begun on the extension to New York Avenue. But costs soon exceeded the amount set aside for the project -- a total of $ 30 million in federal and city funds.

City officials found they did not have enough money to install lights in the new tunnel, put tiles on its walls or lay asphalt on the roadway.

"We just did not anticipate that runaway inflation," said Wallace J. Cohen, a deputy administrator for the D.C. Department of Public Works. "We don't have a pot of D.C. highway money that you just move around. You don't steal from Paul to pay Peter."

When construction stopped, part of the unfinished freeway was turned into a temporary parking lot, known as "The Pit." It was used by D.C. government employes and others seeking cheap parking. Meters installed along the unopened road charged 25 cents for three hours.

In 1984, District officials set aside the $ 6.5 million in city and federal funds needed to complete the extension. The federal funds, which covered 90 percent of the costs, had long been available, officials said, but the District had not been able to come up with its $ 650,000 share.

When work resumed, there were new obstacles. The extension was scheduled to open in April. But, officials said, it was delayed in part because a water pipe burst last winter, heavily damaging electrical equipment needed to operate tunnel lights and exhaust fans.

On a recent tour, the southbound tunnel appeared virtually ready to open. Asphalt had been laid and white ceramic tiles covered the walls. Workers were installing light fixtures and ceiling panels.

Considerable work remains, however, in the northbound tunnel. where asphalt had not been put down.

On top of the tunnel, a long-planned housing project is rising. The $ 9 million, eight-story structure, sponsored partly by Mount Carmel Baptist Church, is to include 133 apartments, some of them available to low-income families at federally subsidized rates.

The project is due to open in June.

Church officials, long troubled by traffic on adjoining Third Street NW, have welcomed the city's plan to open the freeway extension. "That will eliminate all that traffic through the church," said Marvin Cooper, chairman of the church's board of deacons. "This will be a blessing."

About half the cars and trucks that use the Center Leg probably will use the extension, according to city officials. Other traffic is expected to continue getting on and off the freeway at existing entrances and exits south of Massachusetts Avenue.

City officials said they plan to modify traffic regulations on some streets near the extension during the next year to lessen congestion for commuters and reduce traffic in residential areas.

Southbound drivers will be able to enter the Center Leg at New York Avenue and Fourth Street NW, avoiding delays at signal lights on K Street and on Massachusetts Avenue. Nevertheless, backups are expected on New York Avenue until an additional turning lane is provided at Fourth Street, officials said.

"You're still going to hit the traffic jam initially for about another year," said George W. Schoene, city traffic services chief.

Officials plan to remove a section of the New York Avenue median to "We don't have a pot of D.C. highway money that you just move around. You don't steal from Paul to pay Peter."

-- Public Works official Wallace Cohen

provide space for a second left-turn lane for inbound traffic at Fourth Street.

Northbound commuters will be able to use the freeway extension to reach outbound New York Avenue and bypass tie-ups on New Jersey Avenue.

But, Schoene said, left turns will be prohibited from the northbound freeway onto New York Avenue. To go west, drivers must exit the freeway at Second Street, he said.

Next year, Schoene said, New Jersey Avenue, which is now one-way northbound between Second and Third Streets, is scheduled to be changed to a two-way street. A short section of Third Street between M Street and New York Avenue will be closed.

Between K Street and Massachusetts Avenue, Third Street will become two-way instead of one-way southbound, Schoene said. Southbound traffic on Third Street will be required to turn right onto Massachusetts, while westbound traffic on Massachusetts will be prohibited from turning left onto Third or H streets.