The District of Columbia's historic preservation officer approved the construction yesterday of a $154-million residential and commercial development along the Georgetown waterfront, removing the last major barrier to redevelopment of the long-disputed and decaying riverfront property.

Carol B. Thompson, Mayor Marion Barry's agent for historic preservation, ruled that the four new buildings, some elliptical, conformed with the height, style, texture, color, building materials, arrangement and appearance with the Georgetown historic district to the north and does not violate the historic neighborhood as citizens groups had contended.

The Citizens Association of Georgetown, long the most vocal opponent of the project, immediately attacked Thompson's ruling and said it will appeal her decision to the D.C. Court of Appeals. If the decision is not overturned, it will end the 20 years of bickering and fighting that has involved Capitol Hill, Georgetown residents, federal agencies and the city government in the question of the waterfront's fate.

The project's developers, the Western Development Co. of Georgetown, said that construction could begin in 15 days when the necessary city building permit is issued, unless the project is delayed by court action.

The development would be built on six acres between the Whitehurst Freeway and the Potomac River, which now is a tawdry collection of parking lots for towed cars and city garbage trucks, a concrete plant, a salt pile and weeds. The development would include offices, shops and custom-built homes costing up to $500,000.

Barry said he hopes that an adjacent 12 acres of city property will eventually be turned into a park. The Georgetown residents have sought to have the entire 18-acre tract turned into a park.

Herbert S. Miller, president of Western Development, praised the ruling, saying, "At long last this is the opportunity to eliminate the decades of blight along the waterfront and perpetually assure public access to the Potomac River shore as well as generate close to $9 million in new revenue to the city."

City planning director James Gibson said, "The decision means a return of the river to the use by the people instead of an industrial backwater that has kept people from that stretch of the Potomac."

But Donald H. Shannon, president of the citizens association, lambasted the decision, saying, "There is no way that this can be justified by the fact . . . . It must be based on fiction . . . . It's obviously wrong."

In late June and early July, Thompson listened to 53 witnesses during six days of hearings on whether the proposed development, designed by prize-winning architect Arthur Cotton Moore, was in keeping with the historic character of Georgetown, one of the city's oldest communities with a history that spans 200 years.

The neighborhood is distinctive for its low-slung, classic Federal-style homes as well as turreted and richly detailed Victorian homes, the addresses for many of the nation's leaders.

During the hearings, witnesses for the developer argued that Moore's plans called for an attractive project of four buildings surrounding an elliptical boat basin facing the river. Visitors and residents could stroll around the basin on a promenade that would encircle it, much like some old parks in European cities.

Citizens and their attorneys from the Arnold and Porter law firm argued that the size of the new building "would dwarf" the "moderate-sized," two-to-four-story nearby residential and commercial buildings.

They also argued that the project's size would be magnified by its isolation from the rest of the community and that the blank 90-foot wall that would face Georgetown and abut the freeway "creates a massive barrier which would essentially sever the historic link between Georgetown and the Potomac," Thompson wrote.

The citizens also said that the style of the facades of the new buildings "conflict sharply" with the historic architecture of Georgetown's waterfront area, and that the elliptical boat basin and shape of the buildings were not in keeping with the rectangular style of most Georgetown buldings, Thompson said.

But Thompson concluded that the proposed 20- to-90-foot heights conformed to the heights of existing neighborhood buildings. She also said the color and texture of the building materials, red brick with limestone trim and stone bases, as well as the arrangement and appearance of the project, would be similar to Georgetown structures.