BEIJING (AP) _ Senior leader Deng Xiaoping today resigned from his last Communist Party post, as head of the powerful military commission, and cleared the way for his chosen successor to assume undisputed power.

Deng, 85, was replaced by the protege, 63-year-old Communist Party chief Jiang Zemin as head of the Central Military Commission. The move was approved by the ruling party's Central Committee in a meeting that ended today.

The committee also issued a communique warning that China must go through at least two more years of economic austerity to overcome current problems of inflation, excessive growth and corruption.

The official Xinhua News Agency announced Deng's resignation.

The architect of Chinese policy for the past decade, Deng has been seeking to make way for a new generation of leaders centered around Jiang though apparently meeting some resistance from President Yang Shangkun and his allies.

Deng, who has served China's Communist cause for six decades, resigned from the party's ruling Politburo and other top party posts in 1987 but is still recognized as the ultimate source of power in the country.

In a Nov. 7 letter to the Politburo carried by Xinhua he said giving up the last post while still healthy was his ''long-cherished desire.''

In the letter, Deng expressed his confidence in the new party chief, saying party leaders had in June elected ''a leading nucleus headed by Comrade Jiang Zemin and it is now already carrying out its work effectively.''

He said he would now seek to resign from the less important government body whose functions parallel the party military commission, which sets policy for the armed forces.

President Yang, 82, was named the party military commission's first vice chairman, a job left vacant when former party chief Zhao Ziyang was stripped of all leadership posts for tolerating the pro-democracy movement.

The committee's communique did not mention Zhao, who has been under house arrest. There had been speculation that the plenum might recommend criminal charges against Zhao or remove Zhao supporters from their offices.

The changes for now end the power struggle diplomatic sources have reported between Yang, who had been the commission's vice chairman, and younger party leaders.

Yang, a hard-liner, reportedly sought to solidify his place in the post- Deng era by winning the chairmanship, but other senior party members apparently felt the post should be given to Jiang.

Yang was one of the principal leaders behind the decision to declare martial law in Beijing and bring in troops to crush the pro-democracy movement. Soldiers killed hundreds of unarmed civilians in a June 4 assault.

Yang's younger brother, Baibing, the political boss of the People's Liberation Army, was named secretary-general of the Central Military Commission.

The army's chief of staff, Chi Haotian, is said to be Yang's son-in-law, and there has reportedly been opposition to what appeared Yang's attempt to establish a family dynasty within the military.

Liu Huaqing, formerly deputy secretary general of the commission and former head of China's navy, was named the commission's second vice chairman.

''Basically, it looks like a compromise,'' a Hong Kong-based diplomat said of the changes, with Deng getting his way regarding the chairmanship and Yang getting his way regarding his brother.

When asked if Jiang could use the position to develop a power base in the military, the diplomat said: ''If Deng dies, he (Jiang) has no chance ... I don't think the position makes any difference whatsoever.''

Jiang was named party chief June 24 with Deng's backing. He had been party boss of Shanghai, the country's largest city, but lacks a national power base.

The diplomat, who spoke on condition of anonymity, said the new commission lineup indicates ''nothing's been really resolved'' in the struggle to succeed Deng. ''There is no clear sign one way or the other.''

Xinhua said Deng declared: ''Our cause of reform and opening to the outside world has just started. We have arduous tasks ahead and there will be some twists and turns on our way of advance. But I firmly believe that we will be able to overcome various difficulties and carry forward the cause pioneered by our predecessors from generation to generation.''

Deng was purged twice by radicals during the 1966-76 Cultural Revolution, then staged a comeback that turned China around beginning in 1978.

Under Deng, living standards have improved for tens of millions of Chinese. He also opened the country to the West as part of his drive for modernization.

But the harsh suppression of the spring pro-democracy movement showed that Deng was not willing to loosen the party's firm grip on politics.