New multimillion-dollar Magnetic Resonance Imaging machines, which provide far better pictures of the central nervous system and soft tissues in the body than other diagnostic devices, have been approved for use in the Medicare program, sources said yesterday.

The action by the Department of Health and Human Services means that Medicare will routinely pay for MRI diagnosis.

It marks a major step in introduction of a new generation of medical technology into Medicare, the government's health-insurance program for 30 million aged and disabled people receiving Social Security.

MRI machines are far better at some tasks than X-ray or CAT scan machines and will replace them in some functions.

MRI scans are expensive, and concern has been expressed that using them in the Medicare program and in medicine generally will cause a cost explosion.

The new machines may be able to diagnose years earlier than other devices whether a patient has such incurable diseases as Alzheimer's.

MRIs cost between $800,000 and $2 million each. They must be placed in a specially fitted room, costing hundreds of thousands of dollars, to shield them from various types of radiation that could cause them to work improperly. An MRI scan can cost from $360 to $1,400.

After evaluating the MRI a month ago, the Public Health Service told Medicare officials that it is a medically useful device that could be used to improve diagnosis.

Sources said yesterday that instructions will probably be issued early next week to insurance groups that act as "Medicare intermediaries" and, in effect, are Medicare's payment agents. They would be authorized to make Medicare payments to cover MRI scans.