Fit? Sure, it's the same engine presuming the '89 isn't a turbo and even then it will still fit just fine.

The difference is in the engine management system. In '88 Bosch LH 2.2 was used and in '89 it was Bosch LH 2.4 (and I have heard of 740s with the Regina system for the '89 model year, but I doubt it). LH 2.2 and 2.4 work VERY similarly, but they aren't the same. So your current computer, fuel injectors, fuel pressure regulator are all different. The hardest difference to overcome is that LH 2.4 uses an Crank Position Sensor located in the bell housing over the flywheel to sense engine rotation while LH 2.2 uses a Hall Sensor on the distributor for the same function. You don't have a hole in your '88 bell housing to put the CPS into. So the bottom line is that to do it the most easily, without any fabrication, you need to swap the entire engine, distributor, computer, wiring harness and bell housing to do that swap. I hate to see any salvagable brick go to the boneyard, but think it would be cheaper for you to find another, good running 740. But if you have the time and the skills to do it, it can be done.
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Andy in St. Paul - '91 745 227K mi, '91 745 210K, '90 744 194K, all Rex-Regina; '86 745 GLE M46 230K; past 240s