The Iranian government has decided to cancel $8 billion to $10 billion worth of arms orders that the shah had placed with the United States, it was learned today. The cancellations, agreed to in talks between Iranian military leaders and a special Pentagon envoy that ended today, will wipe out most of a $12 billion arms package that, over the next four or five years, was to have turned Iran into one of the most powerful forces in the Persian Gulf region. Agreement also was reached to drastically reduce the number of U.S. millitary and Defense Department contract personnel in Iran, informed sources said. Both a shortage of money and a reduced concept of Iran's international role are behind the cancellations. Iran, hard hit by strikes that have curtailed its lucrative oil exports, is running so short of meney that is soon may be unable to pay even its own military forces, Washington Post Staff Writer George . Wilson reported in Washington. Pentagon officials asknowledged that Iran is having trouble meeting its payroll for its 500,000 troops, Wilson reported, and Carter administration officials expressed concern that this could cause the army, Iran's remaining functioning governmental institution, to break into rival camps. The decision to cancel to purchases effectively shatters the dream of Shah Mohammad Reza Pahlavi, who flew out of Iran on an indefinite vacation Jan. 16, of turning the country into a major military power. With the Iranian economy near colapse and the armed forces strained to the breaking point by more than a uear of opposition unrest, the country's top generals decided they would not be able to find the money or the manpower to go through with the purchases, the sources said. Among the major orders being canceled are 160 General Dynamics F16 fighter planes worth $3.5 billion; seven Boeing AWACS (Airborne Warning and Control System) radarequipped aircraft costing $1.3 billion; two Spruance-class destroyers worth $1.4 billion; about 20 McDonnell Douglas F4 reconnaissance planes valued at about$500 million and 400 Phoenix missiles worth $1 billionplus naval base at Chah Bahar on the Glf of Oman. It had been under construction by Brown and Root, a Texasbased contractor. The Iranian government is also dropping hundreds of smaller contracts covering munitions, communications equipment, vehicles, spare parts and support services. Moreover, the sources said, the Iranian millitary wants out of more than $3 billion worth of European contracts for undelivered weaponry including tanks, missile systems and naval support ships made by Britain plus small submarines built by West Germany. Iran has already paid substantial amounts for the future U.S. arms deliveries under contracts signed in recent years. The government wants to open negotiations shortly to try to recover as much of that money as it can. But even if Iran succeeds in getting some of its payments back, the sources said, contract cancellation clauses could cost it untold millions. Among the U.S. sales still going ahead are two of the four Spruanceclass destroyers originally ordered and two of three refurbished Tangclass submarines. One of the latter has just been delivered and the other is about to be. Other money-saving actions include reducing the U.S. military advisory team from about 960 people to 250. Iran is charged for the services of these military assistance officers. Iran plans to go ahead with some existing training programs but contracts are to be renegotiated to sharply reduce their scopes. Thest programs cover the training of Iranian servicemen to operate and maintain helicopters and sophisticated F14 fighters under contract with Bell Helicopter International and Grumman Aerospace Corp. The sources said the Iranians want to continue the Bell program, but with the fewer than 800 American company employes in Iran, down from 4,000 last year. Many of the U.S. contractor personnel have already left Iran because of the rioting and anti-American sentiment. The American population, which teached a peak last years of about 45,000 including dependents, is now down to about 7,000, according to the latest estimates. Of the American workers in Iran, about 5,000 were civilians employed under defense contracts. With the cancellations and cubtbacks, their number will be reduced by about 75 percent, the sources said. Even before the talks with the special Pentagon envoy, Eric von Marbod, Iran had canceled serveral military projects and indefinitely postponed action on a "wish list" of U.S. arms purchases worth billions of dollars. Construction work on a coprocuction project with Bell to assemble 40 helicopters was abandoned, alsong with similar programs to produce TOW antitank and Maverick air-to-ground missiles. Von Marbod previously tried to reduce American arms sales and projects in Iran during a two-year assignment here that ended in mid- 1977. He had orginally been sent by then-secrtary of defense James R. Schlesinger with a mandate to bring U.S. arms sales under control. Encouraged by the shah's vast appetite for advanced weaponry and former preident Nixon's decisions to sell him practically any nonnuclear weapons he wanted, Amreican arms manufacturers had succeeded in largely skiring U.S. government limitations on arms transfers to Iran. Washington Post staff writer George C. Wilson reported in Washington : Former president Nixon decided to sell Iran such sophisticated weapons as the Grumman F14 to earn money to help the United States pay for imported oil. The future of obtaining thest "petrodollars" has been dicision to cancel previous orders. Iran has been charged in the past with part of the cost of developing the U.S. weapons it purchased. The U.S. government stands to lose this money as well as the highter production runs necessitated by Iran's past orders, meaning the individul cost of the weapons for U.S. military services will go up. The cancellations, besides having a severe impact on the U.S. arms industry, present a number of problems to the Pentagon. For example, if the Nevy wanted to buy the 400 Phoenix missiles slated for Iran it probably would have to go to Congress for extra money. And if the Navy did make the purchase, Iran would be reimbursed for whatever cancellation costs it lost -- perhaps prompting congressional charges that the deal amounted to a bailout for Iran. Also, the Spruance destroyers were tailor-made for Iran and may be difficult to sell elsewhere. One thing the Carter administration may salvage from all this turmoil is a lower total of foreign arms sales, a stated objective of the president.