The Statue of Liberty/Ellis Island Centennial Commission wrapped up five years of work yesterday by recommending not one but two potential plans for Ellis Island, where 20 million immigrants entered the United States.

In a final report to Interior Secretary Donald Hodel, the commission said its first choice is to develop a conference center and hotel on the south half of the 27-acre island in New York Harbor, despite its own finance panel's misgivings about the feasibility of the project.

The second choice, commission chairman Armen G. Avedisian said, is to restore the most significant buildings, bulldoze the rest and develop a public park.

The north half of Ellis Island, containing the Great Hall where immigrants awaited admittance into New York, is being restored as a museum and visitors' center. The question of what to do with the south half, which contained hospital and administration buildings and was visited by relatively few immigrants, erupted into controversy last year when it became clear the commission was considering options the Interior Department found objectionable.

Hodel eventually fired then-chairman Lee A. Iacocca, head of the Chrysler Corp., who favored developing the area into what advocates described as an "ethnic Williamsburg" but which Interior officials considered an amusement park.

Yesterday's recommendation for a conference center essentially endorses a development plan that Interior has long favored, and Avedisian said Hodel told him the department would pursue that option.

"The secretary said he believed he would go the conference-center route and see if it can be proved financially feasible," Avedisian said. He said that the recommendation also had Iacocca's blessing.

Less than four months ago, the commission's finance panel found the conference center proposal "seriously lacking."

That panel, headed by Hilton Hotel executive James R. Galbraith, warned that financing would be shaky and that problems with access and weather would limit the appeal of a conference center on Ellis Island.

The commission's architectural panel, headed by Field & Stream publisher Eugene A. Bay Jr., endorsed the conference center, although it warned that the project could become a "white elephant" if the business its promoters envision does not materialize.

The "ethnic Williamsburg" idea got lukewarm reviews from both panels, and drew little support from the full commission. According to Avedisian, the concept drew five votes from the 53 commission members who cast ballots. The conference center and hotel garnered 22 votes; a park with some restored buildings drew 13. The remaining votes were divided among other proposals.

According to the finance panel's report, the conference center/hotel would cost more than $82 million; the park would cost from $10 million to $40 million depending on how many buildings were restored.

Avedisian said the commission accepted the conference center and hotel only with the proviso that its promoters can prove the idea is financially sound. If not, he said, the commission favors a park as a fallback position.

"We were trying to keep the dignity of the island and don't want something there to detract from what many Americans regard as a national shrine," he said.

The commission was established in 1982 to raise private funds for the restoration of the Statue of Liberty and Ellis Island. More than $310 million was raised for the project.

Interior Department officials said the $140 million restoration of Ellis Island's north half is about half complete. The island, featuring an immigration museum in the Great Hall, is scheduled to open in 1989.