MARION, Ohio (AP) -- The state announced a preliminary agreement Friday to move two schools built on the former site of an Army depot near fields contaminated with rusted barrels of cancer-causing chemicals.

The Army Corps of Engineers, River Valley Local Schools and the state agreed in principle to move the high school and middle school and develop their current property for industrial use.

State and federal authorities began an investigation of the school grounds after questions were raised about a high rate of leukemia among graduates of the high school.

The schools' relocation depends on congressional action, voter approval of a $19.6 million bond levy and agreement by the River Valley Board of Education. The board not only wants to move the schools but also build two new elementary schools at a total cost of $43 million.

A news conference about the proposed move drew concerned parents as well as the media.

Robin Millard, 50, said her 27-year-old daughter, Stephanie, was diagnosed with breast cancer three years ago.

``I've got a grandson I was supposed to be watching today, but I wouldn't bring him onto campus for one hour,'' Millard said.

Lisa Hollaway, an English teacher at River Valley High School, said the presence of television crews and reporters on campus is a constant reminder of the contamination and possible health threat.

``We are getting mixed messages,'' she said. ``They tell us it's safe, now they tell us we have to relocate. There must be something wrong if they're making us move.''

The U.S. House of Representatives on Thursday approved language in a larger defense bill that gives the Army Corps of Engineers authority to consider school relocation as a cleanup option. The vote was 353-63.

That change in the law that governs what the Army Corps can do is essential to the arrangement announced Friday; without it, the Army Corps could not legally take part in moving the schools.

Language providing that legal authority also is in the committee-passed version of the Senate's defense bill, which is due for a floor vote later this month.

After the defense bill becomes law, Congress then can legally appropriate $15 million for the Army Corps' share of replacing the schools.

During World War II, the Army Corps built the Marion Engineering Depot, which stored and renovated heavy construction machinery and handled other supplies. A nearby Ordnance Works made and stored bombs and ammunition. A prisoner-of-war camp also may have used pesticides and arsenic on POWs to get rid of lice.

Gov. Bob Taft said that after at least six months of discussions, state officials concluded that new buildings elsewhere would be cheaper than cleaning up the site to the standards needed for schools. He acknowledged there was some concern about setting a precedent.

``There are other situations that might bear some resemblance,'' Taft said. ``However, here in Marion the soils have been investigated, they are clearly contaminated, the school has already lost a significant part of its property for ballfields and play areas.''

Authorities say they still believe the site -- other than restricted areas -- is safe for students and school staff.

Chris Jones, director of the Ohio Environmental Protection Agency, said the agency will continue to monitor the area while the students are on campus. After the schools are moved, he said, it shouldn't be difficult to get the site up to environmental standards for industrial use.

``Marion might have a problem getting a business to relocate there because of the notoriety of the site,'' Jones said. ``But as far as cleaning it up to industrial standards, it wouldn't be a problem.''

Superintendent Tom Shade said the district will wait until the students are gone to clean up the area.

Building new schools and cleaning up the site would cost the Army Corps up to about $25 million for its share, compared with a total of about $44 million to keep the schools on the site.

Taft proposes that about $4.7 million for the school construction would come from the state. He said the state also would expect to contribute toward the redevelopment of the property.

If a bond issue is approved in November, the new schools could open in August 2003, Shade said.

He acknowledged that two previous levies for elementary schools had failed. ``Part of this was the uncertainty of the environmental investigation and ultimately what it will cost our taxpayers,'' Shade said.

Last March residents voted down an $18.9 million levy. Shade said his administration is asking for $700,000 more this year, but that will cover a comprehensive plan for the elementary as well as secondary schools.