Former Baltimore Orioles general manager Hank Peters was named president and chief operating officer of the Cleveland Indians yesterday, a move that has been the subject of speculation for months.

Peters, 63, signed a three-year contract that appears to give him almost total control of the Indians' baseball and business operations.

"I told Hank he was coming in with no strings attached," Indians owner Richard Jacobs said. "He's free to paint his own mosaic. It's his team to run."

Peters was fired by the Orioles on Oct. 5, the day after the team's worst finish in 32 years. He and Orioles owner Edward Bennett Williams had clashed several times over personnel moves and philosophical direction of the team.

The president's position has been vacant in Cleveland since Peter Bavasi resigned earlier this year.

In accepting the Cleveland job, Peters made several references to the Orioles -- and to Williams.

"I think there was a deterioration of talent and attitude," said Peters, who was general manager of the Orioles for almost 12 years. "We had some high-priced free agents, which was not in keeping with the Orioles' philosophy. I think the Indians will finish ahead of them in 1988, and that's a modest goal."

Williams spent millions to sign free agents Fred Lynn, Lee Lacy, Don Aase, Juan Beniquez, Rick Burleson and Ray Knight. He also pressed Peters to acquire troubled second baseman Alan Wiggins from the San Diego Padres.

In all, those moves will end up costing the Orioles about $15 million, and Peters has maintained both publicly and privately that the money would have been better spent on scouting and development. Meanwhile, Peters has told friends that as Williams was signing those free agents, he was also cutting back on money spent on signing and developing young players.

Williams has maintained that, free agent spending notwithstanding, the Orioles farm system had fallen upon hard times under Peters.

Now, Peters apparently will have a chance to put his theories into practice. Even before he was fired by Williams, there were rumors Peters was headed to Cleveland. He denied having had any contact with Jacobs before he was fired.

The Indians are considered to have a solid nucleus of young talent, but are also coming off a 101-loss season and haven't played in a postseason game since 1954.

"I don't believe in five-year plans, three-year plans or two-year plans. I believe in winning as soon as you can," Peters said. "I think that's one of the things fans expect. We will do everything possible to get there {to the top of the division} as quickly as we possibly can."

Asked what kind of encouragement he had for long-suffering Indians fans, he said, "Be patient a little bit longer. What else can you say? . . . You can't accomplish things overnight."

Peters said his top priority would be naming a manager. Doc Edwards managed the Indians through the second half of the season after Pat Corrales was fired.

Peters said he is interested in bringing some people from the Orioles organization to Cleveland, but added, "I'm very open-minded as far as staff."

"We will try to produce a winner here as quickly as we can, but you can't do it with mirrors," he said. "I think the future is bright for this ball club. I hope we will see some tangible results in '88."