New Jersey Gov. Thomas H. Kean has ordered a quarantine on a downtown industrial site in Newark, the state's largest city, after tests showed the soil was contaminated with dioxin at levels higher than those that led to the evacuation of Times Beach, Mo.

The site, in a downtown section of Newark bounded by the Passaic River, is the former home of Diamond Alkali, which manufactured the herbicide 2,4,5-T there until 1972. The herbicide is frequently contaminated with dioxin, a highly toxic byproduct of some chemical production processes.

In a news conference in Trenton, Kean announced that he had ordered alternative housing to be provided for 75 to 100 people who live in 25 homes within 300 yards of the facility.

"We have no reason to believe these persons are in any health danger," he said. "This step is being taken purely as a precautionary measure to provide maximum public health protection." He also ordered the closing of a wholesale distribution center for fresh produce, less than 100 yards from the site.

Two other firms are also adjacent to the site, a paint company that employs 300 people and a smaller firm that employs 50.

Officials of the state's Department of Environmental Protection said samples taken from the site several weeks ago showed dioxin levels "in the hundreds of parts per billion" and that a second set of tests, returned Monday, confirmed those results. Kean said the levels ranged up to 500 parts per billion.

The federal Centers for Disease Control considers one part per billion to be the maximum safe concentration of dioxin. The federal government announced its unprecedented buyout of Times Beach when tests showed the Missouri town was contaminated with concentrations of 300 parts per billion.

The site is not among the 418 selected for speedy action under the Environmental Protection Agency's $1.6 billion "Superfund" cleanup law, but is among 30 the state has been investigating for more than a year as part of its four-year cleanup program.

It was the first site, however, to undergo soil sampling.

State officials said Kean's emergency fund would pay for relocation costs for residents, but they are unsure where the rest of the money will come from if a major cleanup is required.

Further testing would be conducted "on an expedited basis" to see if adjacent areas have been contaminated as well, they said. Tests also will be conducted on silt from the Passaic River, and Kean ordered that the consumption of fish from the river be banned.

"That shouldn't alter much," said one state official. "An advisory has been in effect on the fish since last December, because of PCB contamination." PCBs, or polycholorinated biphenyls, are another toxic chemical substance suspected of being a human health hazard.