The District government is going back home.

Federal officials yesterday dropped plans to move their workers into a portion of the John A. Wilson Building, allowing the D.C. Council and the office of the mayor to occupy all of the District's historic city hall at Pennsylvania Avenue and 14th Street NW.

The District will pay as much as $8 million annually to the General Services Administration, which holds a 20-year lease on two-thirds of the building under an arrangement that made a $52 million renovation of the 91-year-old beaux-arts structure possible at a time when the city was near bankruptcy.

The city's first prorated payment is due Dec. 15, but it could be up to a year before D.C. officials and workers move from One Judiciary Square to the city government's old headquarters, where the refurbishment is nearly complete.

For D.C. officials, the agreement ends months of pleading with federal officials and fighting a developer to regain control of the building. The return to a city hall near the White House also symbolizes the District's recovery from a demoralizing financial crisis that led to increased congressional intervention in D.C. affairs.

"We're coming home," Mayor Anthony A. Williams (D) said through a spokeswoman yesterday. "Since my days as [D.C.] chief financial officer, I have shared the sentiment of all our citizens that the District government should move back to the Wilson Building."

Del. Eleanor Holmes Norton (D-D.C.), who hosted the meeting yesterday where federal and city officials reached an accord, said that "November 10 will be remembered as the day the District reclaimed its historic city hall, signaling that revitalization is on its way to full realization."

For nearly a year, city officials, led by council Chairman Linda W. Cropp (D), had tried to persuade the GSA to give up the 165,000 square feet of space it had reserved for the Environmental Protection Agency.

EPA Administrator Carol M. Browner told D.C. officials yesterday that she would look elsewhere for space in which to consolidate workers who now are in offices in Southwest Washington and Crystal City.

"Everyone at the EPA realizes the importance to the District to occupy its historic city hall," EPA spokesman Steve Snider said. "We're disappointed that it delays EPA's effort to consolidate, but we respect the District's right to the building."

About 625 EPA employees were scheduled to move into the Wilson Building beginning in January. "Some of the employees were packing boxes," Snider said.

Cropp said yesterday that she was "appreciative of Carol Browner for taking the position that it is in the best interest of the citizens of the District of Columbia that our city hall be occupied, fully, by the District government."

For the past year, Robert Peck, commissioner of public buildings for the GSA, had been trying to work out an arrangement that would satisfy federal and D.C. officials. He attributed yesterday's breakthrough to "Carol Browner being magnificently constructive in putting at least the issue of who occupies the building to bed."

Norton praised Browner for "willingly stepping aside and agreeing to find alternative space for her employees." This week Norton had proposed having EPA workers move to One Judiciary Square instead of the Wilson Building, so that the D.C. government could use the entire building.

Peck said the GSA has not agreed to Norton's plan but added that it will look at One Judiciary Square as a possible alternative site for the EPA. One Judiciary Square became a refuge for the District's highest officials in 1992, when then-Mayor Sharon Pratt Kelly fled the crumbling Wilson Building. The D.C. Council moved out five years later, just before the renovation began. The Wilson Building, named for the late council chairman, has been closed for two years.