Harold Varmus, director of the National Institutes of Health since 1993, announced yesterday that he will resign at the end of the year to become president and chief executive officer of Memorial Sloan-Kettering Cancer Center in New York.

The move opens up the powerful, presidentially appointed position at a time of unprecedented biomedical progress--including promising and often controversial inroads into genetics, behavior, reproductive medicine and aging.

Insiders said that although the directorship of NIH is considered a nonpartisan position, growing edginess among conservatives and liberals over issues such as human embryo research and genetic privacy could make for an unusually interesting and perhaps volatile headhunt, especially in a presidential election year.

Varmus, 59, has often said that six years is about the right amount of time to lead the NIH. Before arriving there, he shared a Nobel prize for his cancer research in 1989. He is among the nation's most respected biomedical researchers and managers. Although his heavy emphasis on molecular biology alienated some federal researchers during his tenure, he has become something of a living legend at NIH for his ability to woo bipartisan congressional support and attract talented researchers to the Bethesda campus.

Observers said that, backed by Sloan-Kettering's deep pockets, Varmus has the potential to complete the Manhattan institution's long-standing but unconsummated effort to make its research enterprise as renowned as its high-profile clinical center, which is among the two or three largest in the nation.

"I was looking for an opportunity to continue to run something," Varmus said yesterday, at "a place where science and clinical activities can be brought together in an important way, and in a city I deeply like." Varmus said outgoing Sloan-Kettering President Paul A. Marks had promised him the resources and the flexibility to "reshape" the center's scientific program, including construction of a new laboratory building to augment the several research labs already surrounding the center's Memorial Hospital on Manhattan's East Side.

Varmus said his starting salary will be "a little below" the approximately $1 million that is Marks's current base salary. At NIH, he has been earning about $152,000 annually.

The change of directorship comes at a critical time for NIH, scientifically and politically. The agency's funding has grown from less than $11 billion when Varmus arrived to nearly $16 billion in 1999, and many in Congress are committed to seeing the agency's budget double within the next five years.

At the same time, the agency has increasingly been forced to tread carefully on Capitol Hill as some of the fastest-moving arenas of research--including studies of human embryonic "stem" cells and behavioral genetics--have raised the hackles of various politicians and interest groups.

In an Oct. 7 letter, Varmus encouraged President Clinton to appoint a successor "even at this late stage in your second term." But sources inside the White House and at NIH said yesterday that it is not clear how the politics of Varmus's succession will play out.

Given the strong showing so far of Republican presidential front-runner George W. Bush, Clinton may not want to leave it to the next administration to choose the person who will lead the nation's premier biomedical research institution into the new millennium.

On the other hand, if Clinton does nominate a new director before the end of his term--the culmination of a process that entails the formation of a Health and Human Services search committee and a final recommendation from HHS Secretary Donna E. Shalala--there is no guarantee that the Republican-led Senate will confirm his choice.

Indeed, even if Clinton decides on a nominee, it is not clear that anyone would want to take the job before the 2000 elections and the ensuing Cabinet shuffle, which could result in the appointment of a new secretary of HHS.

"When most people take a job, they want to know who their boss is going to be," said one NIH official. Sources said Clinton might bypass that potential complication by nominating someone who is already well-known and well-liked on both sides of the aisle--traits they said probably apply to the three possible candidates whose names were uttered most frequently yesterday. They are National Cancer Institute Director Richard Klausner; National Institute of Allergy and Infectious Diseases Director Anthony Fauci; and National Institute of Mental Health Director Steven Hyman.

NIH Deputy Director Ruth Kirschtein will serve as acting director beginning Jan. 1 until a permanent replacement for Varmus is named.

Varmus--who grew up on Long Island, went to medical school at Columbia University in Manhattan and has two sons living in Queens--said he is looking forward to enjoying New York's "rich cultural diversity." He said his wife, Connie Casey, a Washington journalist and editor, will pursue work in New York's journalistic and publishing industry.

One regret, Varmus said, is that he'll have to give up his passionate commitment to riding his bicycle to work. "It's a little more complicated in New York," he said.