The National Park Service will announce today its approval of a controversial, $39 million restoration and development project at Gettysburg National Military Park, Interior Department Secretary Bruce Babbitt said yesterday.

The approval allows the Park Service to enter into a long-term agreement with a nonprofit foundation that will solicit donations and arrange bank loans to finance a new visitor's center and museum at the park. The project also calls for restoring key parts of the landscape at the battlefield, perhaps the most hallowed ground of the Civil War.

The project underscores the innovative approaches being taken by the cash-strapped Park Service to meet visitor demands and refurbish historical sites. Public-private partnerships are underway at a variety of Park Service properties, including the Washington Monument, Independence Hall in Philadelphia and the Thomas A. Edison lab in New Jersey.

But the Gettysburg project, proposed more than two years ago, has drawn persistent criticism. History buffs opposed development in the park and local merchants complained a new visitor complex would siphon tourist dollars from them. The criticism led the Park Service last year to scale back the size of the project.

"It's been a long, iterative process in which we have heard again and again from all the different parties. We have discussed this thing endlessly. It is now time for a decision," Babbitt said in an interview.

While the Park Service decision "will not be received unanimously," Babbitt said, "it is important we do the best we can to restore the landscape and appearance of that battlefield as it was in 1863."

Under the plan, the Park Service will tear down two buildings--the existing visitor center and a building that houses a gigantic 1884 "cyclorama" painting of Pickett's Charge, the climactic moment in the Gettysburg battle.

Demolishing the buildings will allow for restoration of about 20 acres on the edge of the field where Union troops turned back Confederate soldiers on the battle's third day.

The new visitor complex will include a museum to display a priceless collection of Civil War rifles, drums and other artifacts. Park officials have said current storage facilities for the collection are inadequate, allowing rust and mildew to occur.

The complex, which will be built about half a mile from the current visitor's center, will cost about $22 million and will be financed through bank loans and a nonprofit foundation set up by developer Robert Kinsley of York, Pa.

Construction cannot begin until the financing is secured. Under the most optimistic projections, the new visitor's center could open in four to five years, Gettysburg Park Superintendent John A. Latschar said.

The Park Service decided to try such a venture after officials concluded Congress would not appropriate the money.

Marie Rust, the Park Service's northeast regional director, approved and signed the "record of decision" at noon yesterday in Philadelphia, officials said. That document signifies the end of the federal planning process and gives Gettysburg the go-ahead to design and build the visitor complex.

Gettysburg attracts about 1.7 million visitors each year and Rust said new facilities should allow the Park Service "to deliver a better visitor experience" aimed at improving the public's understanding of the Civil War.

The Park Service decision, as Babbitt noted, will not please some critics. Opponents have questioned the wisdom of tearing down the cyclorama building, designed by architect Richard Neutra and considered by some experts as a historic landmark. Area merchants and officials have complained that the plan was "forced down the throats of the citizens," as businessman Eric Uberman put it.

Congressional committees also scrutinized the plan. Last week, House-Senate negotiators on the Interior Department spending bill dropped an amendment that could have blocked the project.

"We've had a lot of angst on this," Rust said. But, she added, Gettysburg has a "long way to go . . . . We need everyone in this process and we need everyone now."

CAPTION: Interior Secretary Bruce Babbitt said "it is important . . . to restore . . . that battlefield as it was in 1863."