Deputy Postmaster General Jim Finch -- who is not eligible for a U.S. pension when he steps down at the end of this week -- negotiated a retirement package that would have paid him $22,000 a year for the rest of his life, according to several Postal Service sources.

The Postal Service Board of Governors has rejected the package as too costly and inappropriate because Finch, 47, did not work for the government long enough to qualify for the federal retirement system.

The issue is still alive, however. Postal Service sources said the governors have instructed the new postmaster general to negotiate a less expensive retirement package for Finch, who has been deputy postmaster general since June 1983 at an annual salary of $71,000. Finch, meanwhile, was quoted in the Feb. 4 edition of the Federal Times saying he wants an agreement that will let him leave with his "head held high."

Referring to Finch's initial proposal, board member Ruth O. Peters said, "The postal service is not in the annuity business. We have a postal retirement system, and this would usurp that."

Board member George W. Camp of Atlanta added, "It was just not acceptable to the board . . . . "

An agency spokesman said Finch would not comment on the discussions, and attempts to reach Finch were unsuccessful. However, he told Federal Times, "I've done a good job and what I am seeking is an arrangement that will permit me to leave USPS with my head held high."

Finch has worked for the Postal Service since 1973. Normally, federal employes must have 30 years' service to receive a pension at age 55, or 20 years' service to receive one at age 60.

The deputy postmaster general serves at the pleasure of the governors and the postmaster general. Finch was deputy under William F. Bolger, who retired at the end of last year. The new postmaster general, Paul Carlin, picked an agency veteran, Jackie A. Strange, to take over Finch's job, effective Feb. 15.

The deputy postmaster general is like a political appointee and can be removed when the agency gets a new head. Those who don't meet requirements to collect a federal pension leave without one.

But the postal service, a quasigovernment agency, has provided other top executives with hefty retirement packages. Bolger, who is now a vice president of Gray and Co., a Washington public relations firm, is to receive $62,500 in bonuses, in installments, in addition to his federal pension. The postal board also voted in 1982 to pay Bolger's life insurance premiums.

Bolger's successor, Carlin, was told by Postal Board Chairman John R. McKean to negotiate a retirement contract for Finch to ease his departure and allow Carlin to choose a deputy, sources said. McKean did not return a reporter's telephone calls.

Under the proposed package, according to sources, Finch would give up his rights to severance pay in return for $22,000 a year, plus some cost-of-living adjustments.

Under the arrangement, if Finch lived to age 70, the agency would have paid him more than $700,000. Finch, a lawyer, would have received the amount regardless of whether he went back to work.

The sources said Carlin signed the agreement, but when he presented it to the governing board at its Jan. 7 meeting -- his first as postmaster general -- some members told him he did not have the authority to sign such a contract. "The governors blew their corks," said one source who asked not to be identified.

"It was a long and heated discussion," said board member Peters. "It was much longer than anticipated . . . . Finally we decided it was not the thing to do."

"Finch is not an old gentleman," she added. "He is a young gentleman."