The Mutual Broadcasting System announced yesterday that it has signed a contract to have a Western Union Satellite transmit its network radio programs - ending 51 years of land line transmission.

Under a new seven-year contract, Western Union will transmit Mutual's program from its headquarters in Arlington, Va., through the Westar I satellite to Mutual's 780-affiliate radio stations and the 90 affiliates of the Mutual Black Network. Mutual is the world's largest radio network.

The move is a "momentous step," said C. Edward Little, president of Mutual. "No longer will network radio broadcasts be exclusively fed through land lines provided by the telephone company."

He said there is "a bright day coming - a day with incredibly wide latitude of program selection and network professionalism."

Little said within 18 months, following FCC approval, "Mutual will be able to feed as many as three stimultaneous programs nationwide on three separate channels."

He also said the network will also have the ability to transmit in stereo. In the future, Little said, "Mutual will be able to feed as many as six programs at the same time."

Gary Worth, the company's executive vice president, said the network's move into satellite broadcasting was a $10 million project.

Besides providing hourly and half hour newscasts 24 hours a day, Mutual feeds its stations sports reports, live coverage of major sporting events, and news-features.

"It is the unique and significant combination of satellite transmission with small-antenna receiving terminals that has opened up this new dimension in radio programming," said James T. Ragan, vice president of broadcast services for Western Union.

He said the new system will provide a "quantum leap in uniform quality to all reception points."