Prince George's County police ended their eight-day work slowdown yesterday after negotiators for the police union and the county agreed on a contract in a predawn negotiating session.

The settlement, reached a t 4:30 a.m., ended 20 months of often bitter negotiations that had been stalled since June 29 when police union representatives stalked out of negotiations.

That night members of the union, the Fraternal Order of Police, unanimously passed a vote of "no confidence" in County Executive Winfield M. Kelly Jr. and Police Chief John W. Rhoads and began the slowdown that brought traffic enforcement to a virtual standstill.

During the first seven days of the slowdown only 280 tickets were issued by county police - down from the usual rate of more than 1,000 tickets issued each week.

Although neither side publicly revealed the terms of the settlement yesterday, it was learned that the county had agreed to allow police officers to retire after 20 years of service on a pension calculated at 48 percent of the officer's final salary. Currently officers retire after 25 years with a 50 percent persion.

In return, the Fraternal Order of Police agreed to accept lower longevity raises for present and future policeman than the officers had sought.

The three-year contract, which is retro-active to July 1, 1977, must be ratified by the union membership at a meeting at 7:30 p.m. tomorrow and then by the County Council. Approval from both is expected.

Both Kelly and union president Laney Hester said they were happy with the contract. Hester got the 20-year retirement plan he had insisted on and Kelly said he will not have to raise taxes in order to finance the settlement.

"This is an excellent contract for us," Hester said. "We got what we wanted and we got the things we absolutely had to have. There are a lot of pluses in this contract."

County police had become bitter about having worked more than a year without a contract. Also contributing to their decision to stage the job action were Rhoads firing of an officer for fatally shooting a fleeing shoplifting suspect and the shooting deaths June 26 of two Hyattsville officers.

The deaths of officer Albert M. Claggett IV and James Brian Swart, which occurred three days before negotiations broke down, brought emotions to a peak. Many officers blamed old facilities at the Hyattsville station for the shootings.

Although both parties were all smiles at a news conference called to announce the contract agreement. Hester indicated he would probably not ask his men to retract the no confidence vote in Kelly and Rhoads.

Negotiations had broken down June 29 over the issue of how the county would pay for the 20-year retirement plan. The county had asked that the union agree to limit pay raises for future employes to 11 percent - not including promotion raises.

Hester had agreed to cuff off raises at 20 percent but would not go lower. At that point the county was offering retirement after 20 years with a 46 percent pension.

Early last week county personnel director Donald Weinberg and union lawyer George Cohen began working on a plan that would increase the retirement benefits to the officers without costing the county more money.Kelly has maintained all along that he would not agree to a contract that would result in a property tax increase.

Under the contract, a police officer who does not win promotion still will receive eight pay raises and cost of living raises over a 14-year period.

Instead of receiving a five percent raise each time, he now will receive three percent. Hester would not comment on the contract yesterday but there appeared to be several reasons why he agreed to it.

They include

The 20-year retirement. Because police officers will be retiring sooner and about 150 men immediately will become eligible for retirement under the new contract, the department will have more promotions available. As a result, fewer men will remain in the same job for 14 years and be affected by the smaller pay raises. Vacancies created by retirements also will make it easier to hire black officers to integrate the force - now 91 percent white.

Sick leave. Retirees will receive 50 percent of unused sick leave in cash. This will amount to a large severance check for many officers.

Equal treatment of all officers. If the county and the union had agreed on a contract affecting only future employes' pay raises, two salary levels would have been created and quite possibly, divided the department, some officers said.

During the eight-day slowdown which was never officially announced, traffic violations were widely ignored by officers. Patrolmen waved at speeders who passed them in many instances and instead of cruising the streets when nothing was going on, parking behind buildings where they could not observe traffic violations.