The D.C. Council authorized the sale of an old police station yesterday for conversion to housing on Capitol Hill.

Two council members vied for credit for the project and one member denounced it for relinquishing a property that might be used for mental patients or juvenile offenders, but the measure passed on a voice vote with only two objections.

The old 9th Police Precinct Building at 525 Ninth St. NE had been the center of a bitter confrontation in March 1986 when neighbors picketed and then sat in the mayor's office to block city plans to turn the century-old structure into a jail.

Mayor Marion Barry dropped the jail project because of the protesters, including council member Nadine P. Winter (D-Ward 6), who staged a four-hour sit-in in his office.

Yesterday Winter tangled with council member Betty Ann Kane (D-At Large), over whose bill would be used to authorize the sale. The city is expected to accept bids from developers in the next two months. The building would be divided into six to nine units, either rental or condominium. Two or three of the units would be reserved for moderate-income tenants.

Council member John A. Wilson (D-Ward 2) denounced the sale as irresponsible at a time when the city government is under pressure to find facilities for mental patients being discharged from St. Elizabeths Hospital as well as for homeless people and juvenile offenders.

"We are giving away a property we know we will need because of legislation the council passed and court orders we are under," Wilson declared. "Then we'll buy another property for gobs of money . . . because somebody made a political deal."

Winter rejected the accusation, saying that the old police station, which has been vacant for 10 years, is not suitable for a group home. She noted that within a block there are a shelter for homeless women, a facility for teen-age runaways and an elementary school.

Council member H.R. Crawford (D-Ward 7) declared that Winter's ward "is saturated with a variety of community-based facilities. You certainly have played your part. There will come a time that every ward will have to take its share."

Crawford has introduced a bill requiring that community-based residential facilities, such as shelters, group homes for mental patients and drug treatment centers, be distributed around the city according to a "fairness formula."

Council member Frank Smith Jr. (D-Ward 1) said his ward had had "an avalanche of institutions" that are "incompatible with a residential neighborhood." He said he would try to amend Crawford's bill to require council approval for each government-financed home or shelter.

But the debate soon turned back to the dispute between Winter and Kane, who lives near the old police station, over whose bill should be used to authorize the housing conversion. Eventually, Winter's bill was passed with a slight change as a substitute for Kane's.

The only opposition on the 13-member council came from Wilson and from Chairman David A. Clarke. Clarke said a property sale should not be authorized by emergency legislation. But Kane said she was certain that identical permanent legislation will follow. She said the emergency bill would probably speed the project by six months.