BOSTON--A group of homeless people agreed yesterday to end a three-month camp-in on the steps of City Hall after the city promised to give them an office and establish a hotline for the homeless.

The fledgling advocacy group, called Homefront '88, announced the agreement along with city officials in the City Hall lobby. Their bedrolls, cots and mascot dog were still outside the building.

Officials hailed the move as an example of protest turning into political power.

"They have shown how groups become empowered to speak for themselves," said Ann Maguire, executive director of the city's Emergency Shelter Commission.

Homefront '88 wants to be "part of the rebuilding of the city and basically backing the humanity of this city," said its spokesman, John Grizz Williams, 32, originally of Durango, Colorado.

Williams said he's pleased with the agreement. "We're not weak no more," he said.

Williams, who works in demolition, and his wife moved to Massachusetts to take shelter with her family after they were burned out of their home and lost all their money, he said.

Homelessness, Williams said, "is a nationwide epidemic that could one day affect everyone else. Our goal is to one day see everybody in a house they can afford, on their own."

Williams said group members would leave the encampment outside City Hall today for shelters or to stay with friends.

Neil Sullivan, policy advisor to Mayor Raymond L. Flynn, blamed the predicament of the homeless, who number an estimated 3500 in Boston, on Reagan administration cutbacks in public housing construction.

"Homelessness did not just happen," Sullivan said. "People were cast out by the federal government since 1981."

During the first weeks of the protest, police threatened to arrest Homefront '88 members until a city councilor intervened. But it was only two weeks ago that representatives of the group began meeting with city officials.

Under the agreement, the city will pay six months' rent, telephone service and supplies for an office at one of the city's community health centers to conduct advocacy work on behalf of the homeless.

At the same time, a homeless person will be appointed to the city's Emergency Shelter Commission. Maguire also will urge the Governor's Advisory Board on Homelessness, co-chaired by Kitty Dukakis, to appoint homeless people to its board.

In addition, a hotline telephone number for homeless people to call during emergencies will be set up through City Hall.

For its part, Homefront '88 must prove to the city it can establish a functional organization with officers and staff. Under the agreement, the group also must find a developer or non-profit housing group that will commit to planning to build affordable housing.

If those goals are met, the city will provide the advocacy group with a city-owned building that can be turned into six to eight units of housing.

While some of the homeless protesters will stay around Boston, others, like Robin Moore, may be moving on.

A 31-year-old native of South Haven, Michighan, who chooses to be homeless, Moore arrived here last week from Santa Barbara, California. He said he came to Boston because "this seems to be where the action is, putting pressure on city government to do something about housing."