Heisman trophy-winning quarterback Doug Flutie of Boston College said yesterday he will sign a contract, reportedly worth at least $7 million over five years, with the New Jersey Generals of the U.S. Football League.

"I'm a little bit relieved that this is out of the way now and I can get to work," he told the Associated Press in Boston.

He is expected to sign the contract next week and report immediately to the Generals' training camp, already opened in Orlando, Fla. He would be the third straight Heisman trophy winner to sign with the USFL, following Herschel Walker of Georgia, who plays for the Generals, and Nebraska's Mike Rozier, who recently bought out his contract with the defunct Pittsburgh Maulers.

It is believed the deal would make Flutie the highest-paid pro football player and the highest-paid rookie in any sport.

The Generals will play their first exhibition game Feb. 2 against the Memphis Showboats in Charlotte, N.C., and will open the regular season Feb. 24 in Birmingham.

In announcing his decision to sign with the Generals, Flutie was passing up the chance, at least for now, to play in the National Football League. But his attorney, Bob Woolf, said, "I didn't hear from anybody in the NFL."

In Honolulu for the Pro Bowl, NFL Commissioner Pete Rozelle told reporters he regretted that Flutie was about to sign with the Generals, but that the Generals' offer scared away many teams in his league.

"He's an exciting player and a fine young man," Rozelle said. "I'd like to see him in the NFL. Any exciting young player is a loss. We didn't want to lose him." But, he added, "There's no one player, regardless of how good he is, who can make a difference in the NFL."

The commissioner also said that "some, if not all, of the clubs in the NFL were concerned about the money. It has a bigger ripple effect with the players in our league."

A spokesman for ABC-TV, which televises USFL games, said the network is "very pleased" about the announcement, "especially since our first telecast has not yet been set." New Jersey at Birmingham "would be a natural" for nationwide coverage, he added, with Flutie in a Generals uniform.

In New York, the Generals' owner, Donald Trump, told AP, "It's going to be great. Having Doug Flutie will be fabulous not only for the Generals, but for their fans."

Woolf said negotiations with the Generals went quickly because "they came right to the point," and there were benefits in addition to the contract. He declined to discuss specific terms.

"It was a great advantage to be associated with Donald Trump and to be in New York and to play in the same backfield with Herschel Walker and to have the chance to have his best friend (Boston College wide receiver Gerard Phelan) play on the same team," Woolf said. "Doug was in here for a few minutes today and Mr. Trump was on the phone and he said, 'We want Gerard.' " (Woolf said he would meet with the Generals next week regarding a contract for Phelan.)

Woolf said, "This was such an attractive offer. It would be ridiculous not to accept it. I don't think it took Doug 15 minutes to make up his mind."

In answer to a question about the Heisman prestige, Rozelle was quoted as saying, "With all due deference to the Downtown Athletic Club (which sponsors the award), I don't know if the Heisman trophy should be used as the true barometer for how good a player is going to be in the NFL."

Though Flutie led Boston College to a 10-2 record, a Cotton Bowl victory and the Nos. 4 and 5 national rankings in the two wire service polls, some pro teams had expressed concern about his chances as a pro because of his height, only 5 feet 9 3/4.

But interest in Flutie peaked with his last-second touchdown pass that beat Miami, 47-45. Subsequently, NFL teams again appeared cautious after Flutie turned in less-than-stellar performances in the Cotton Bowl and the Hula and Japan bowls.

In Buffalo, Bruce Nicholas, director of player personnel for the Bills, who hold the NFL's No. 1 draft pick, said Flutie was very much under consideration up to yesterday. "I think he's good enough to play in our league, or any league," Nicholas said. "We do like him a lot as a player." But the Bills were moving more deliberately than Trump in preparation for the NFL's April draft.

"It's going to feel good being with a good organization," Flutie told AP. "It's a first-class outfit all the way. It's going to be a big challenge for me."

Woolf said he met with Jay Seltzer, the Generals' president, for six hours Tuesday in Orlando, and much of the deal was hammered out. In New York Thursday for a television appearance, Woolf spoke with Trump and later with Seltzer on the phone. Woolf then called Flutie and his father Dick. Shortly, Flutie called back and said, "I'm ready to commit."

The Generals now have veteran Brian Sipe as their No. 1 quarterback, but fans lighting up the team's switchboard yesterday were thinking only about Flutie.

"The phones have been ringing all afternoon," said the manager of the ticket office, Jim Squires. "We're planning to bring in almost everybody this weekend, some on overtime, to work the phones. We figure that once the news gets all around, a lot of people will be calling about tickets."