Ray Miller's two-year tenure as manager of the Baltimore Orioles ended yesterday when the Orioles chose not to exercise their contractual option to retain him within 72 hours of the conclusion of the season, informed sources said last night.

Miller's two-year contract, signed on Nov. 11, 1997, contained a clause that stipulated that by choosing not to use their option to retain Miller, the Orioles effectively ended their managerial association with him, these sources said.

If the Orioles wanted to retain Miller for a third year they would have had to inform him within 72 hours after Sunday's final game. By not doing so, according to the contract Miller signed, the club is free to seek his successor. Under terms of the contract, the Orioles will pay Miller $100,000 by Dec. 1.

Miller was paid $600,000 for each of the two years of his tenure. He had incentives of $50,000 had he won the American League East title; another $50,000 for winning the AL championship; and $100,000 had he won the World Series.

The Orioles are expected to begin their search for a new manager today. Angelos and General Manager Frank Wren, according to sources, have a list of potential candidates, including former Milwaukee Brewers manager Phil Garner, former Colorado Rockies manager Don Baylor, former Chicago Cubs manager Jim Riggleman and Orioles' director of player development Tom Trebelhorn, who once managed the Brewers.

Garner and Riggleman are not employed and can be interviewed immediately. To interview Baylor, the hitting coach for the Atlanta Braves, the Orioles would need the Braves' permission. Sources said the Braves are willing to grant such permission.

The Orioles do not have a timetable for naming Miller's successor, sources said.

Miller, who on Tuesday said he planned to drive today from Baltimore to his home in New Athens, Ohio, could not be reached yesterday. However, he previously has indicated he was not interested in another job within the organization.

A 78-84 record this season left Miller, 54, with a two-year record of 157-167. He previously said that if the Orioles do not bring him back for a third season, he plans on staying at home and doing "normal things."

Unclear for now are the fates of the Orioles' coaches. Only hitting coach Terry Crowley and pitching coach Bruce Kison are signed through 2000, and only Crowley seems likely to be retained.

First-base coach Marv Foley and third-base coach Sam Perlozzo, both of whom have minor league managing experience, are expected to receive interviews to succeed Miller. But the Orioles have made clear their intention to hire someone with major league managing experience.

Miller, who pitched in the Orioles' minor league system in the 1970s and served as their pitching coach from 1978 to '85 and again in 1997, remained close to Angelos during his managerial tenure, despite two disappointing seasons.

Miller spoke to Angelos several times during the final week of the season, when it appeared Miller would not be brought back. Monday went by without any contact between them, but on Tuesday Miller and Angelos had a meeting that did not produce an announcement.

In the season's final days, Miller presented a defense of his regime, pointing out the roster shortcomings, pitching shortages and lack of team speed that often handcuffed him as a manager. Miller said he believed the team's 42-33 record in the second half of the season proved he is capable of winning in Baltimore, given a functional roster.

However, the overall failure of the team to do better despite its $84 million payroll was more than Miller could overcome. The Orioles finished 15-34 within their division, and despite outstanding individual seasons from a half-dozen players, fell out of contention for good after a 10-game losing streak in late June and early July after missing the playoffs in 1998.

In August, Wren said he had a "difficult time justifying" how a team that finished first in the AL in defense, fourth in pitching and sixth in hitting ended up in fourth place in its division.

Wren has labeled both this season and next as "transition" years and has set about building a healthy farm system. Under Wren, the Orioles have stockpiled young pitchers, and successfully signed their first 13 picks from this June's amateur draft. Sources said Wren was not satisfied with Miller's performance.

Last week, Miller said: "This team has tremendous direction right now. For the first time there's a little light under the door."