Attorney General Edwin Meese III and several White House officials arranged for federal appeals court Judge Irving R. Kaufman to be awarded the Presidential Medal of Freedom, the nation's highest civilian honor, after Kaufman agreed to retire from active service, according to sources familiar with the episode.

According to one well-informed source, the judge's retirement and the Medal of Freedom were part of an "explicit" trade. Meese denied through a spokesman that any trade was made.

The retirement of Kaufman, a liberal on many issues, makes room for a conservative on the closely divided 2nd U.S. Circuit Court of Appeals in New York. The Reagan administration plans to nominate Stuart Summit, a former law partner of Deputy Attorney General Arnold I. Burns, to fill the vacancy, according to knowledgeable sources. Summit would be the Reagan administration's eighth appointee to the 13-member panel, considered one of the most important federal courts.

Kaufman had long sought the Medal of Freedom, according to knowledgeable sources. After The Washington Post made inquiries, the White House announced yesterday that he will receive it next month.

Two senior White House officials opposed awarding Kaufman the medal, but other White House officials joined Meese to persuade President Reagan to give it to him, informed sources said.

Kaufman, who announced in June that he was taking "senior status" on the appeals court, refused comment yesterday.

Kaufman, who as a trial court judge ordered the execution of convicted Soviet spies Julius and Ethel Rosenberg in 1951, is known for his liberal rulings on the First Amendment, civil rights, prisoners' rights, environmental protection and other issues.

Yesterday's White House announcement said Kaufman, 77, will be cited for "his exemplary service to our country as a federal judge in New York, his works as chairman of the president's commission on organized crime and his multifaceted effort to promote an understanding of the law and our legal tradition." Former chief justice of the United States Warren E. Burger will receive the medal at the same time, at a ceremony on Wednesday, Oct. 7.

Responding to questions, Justice Department spokesman Terry H. Eastland said yesterday "it is my understanding that there was no quid pro quo" between the medal and Kaufman's decision to retire from active status. "These decisions were independent of one another. They were not related. That's my understanding."

Eastland said, "My understanding is that the president had decided to award this medal to Judge Kaufman while he was a sitting judge and the only reason he didn't give it to him then is that the president was advised not to give it until he was in senior status."

Eastland provided a statement from Meese saying, "At no time did the attorney general's recommendation or the president's decision in that matter have anything to do with whether or when Judge Kaufman took senior status."

Kaufman declined comment through a law clerk. "It is the policy of the chambers not to comment on press reports," said clerk Tom Dahdouh.

In a May 20 letter, Kaufman informed Reagan of his decision to take senior status effective June 30. Federal judges are appointed for life, and a judge with senior status generally takes on a lighter workload but is still permitted to rule on cases. The decision to take senior status creates a vacancy.

Sources said Kaufman has been seeking the medal since the Carter administration. The Presidential Medal of Freedom is awarded "to persons who have made especially meritorious contributions," according to a White House fact sheet. Reagan has given the medal to 61 people, including orchestra conductor Mstislav Rostropovich, former U.N. ambassador Jeane J. Kirkpatrick, singer Frank Sinatra, and the Rev. Billy Graham.

The Washington Post interviewed several sources with close knowledge of the extensive discussions and negotiations between Kaufman and the administration over his retirement and its timing, and the protracted internal debate over whether he should receive the medal.

According to one source, Meese attended a dinner party at Kaufman's Park Avenue apartment early last spring at which Meese suggested that Kaufman could obtain the medal if he agreed to take senior status. Meese said through his spokesman that he did attend the dinner and that he had discussed the medal at some point, either then or later, with Kaufman. However, Meese The Presidential Medal of Freedom is awarded "to persons who have made especially meritorious contributions."

said it is "absolutely untrue" that he discussed a trade of the medal for Kaufman's retirement, Eastland said.

According to Eastland and others, Meese strongly advocated giving Kaufman the medal. These sources said Kaufman was proposed in the administration for the medal last spring, as he had been in earlier years.

At that point, sources said Meese spoke to Reagan about giving the award to Kaufman, and the president agreed. Subsequently, objections to the award were raised by White House counsel Arthur B. Culvahouse and White House deputy chief of staff Kenneth M. Duberstein.

Duberstein and Culvahouse could not be reached for comment yesterday.

Culvahouse questioned whether the award should be given to a judge in active service, saying that this would be unprecedented, sources said. At some point in mid-April, Reagan reversed himself because of this objection, the sources said.

Meese then met with the president and chief of staff Howard H. Baker Jr. to argue for the award, sources said. They said Anthony R. Dolan, the president's chief speechwriter, and T. Kenneth Cribb Jr., an assistant to the president and a former top aide to Meese, also argued in favor of giving Kaufman the medal, and the president decided to do so.

Cribb could not be reached for comment yesterday. Dolan said he had been an advocate of giving Kaufman the award for four years. He also said he "agreed completely" with Culvahouse's objection that the award could not be given to a sitting judge.

About May 1, Kaufman informed Meese that he would take senior status in 60 days, at the end of June, one well-informed source said. Kaufman underwent open-heart surgery this spring and his decision to retire was related to his health problems, the sources said.

Meese urged Kaufman to retire sooner because the awards were being announced in mid-June, the source said. Kaufman then wrote to Reagan May 20 sticking with the planned June 30 retirement date.

Kaufman was not among the recipients when the medals were announced June 23. Among those who were honored were the late Justin W. Dart Sr., an industrialist and longtime Reagan backer; the late actor Danny Kaye, and Anne Armstrong, former ambassador to Britain and cochairman of the Republican National Committee.

Baker called Kaufman to assure him he would receive the award even though he could not be included in the group of winners announced June 23, two sources said. Kaufman asked Baker for a letter from the president informing him officially that he would receive the award, and the letter was sent in early July, the sources said.