The Shakespeare Theatre at the Folger, looking to increase public awareness of classical theater and heighten its own profile at the same time, today will announce the creation of the Will Award. Named for William Shakespeare, it will be conferred annually upon an individual who has made an outstanding contribution to classical drama in the United States.

"Despite the fact that Shakespeare is the most performed playwright in America, there is no American award that celebrates the tremendous role the classical theater has played in the development of our theater," said R. Robert Linowes, chairman of the Shakespeare Theatre's board of trustees, yesterday. "We hope the Will Award will have the same national impact as the Kennedy Center Honors."

The first Will Award will be presented March 18 at a gala dinner at the National Building Museum. E. F. Hutton, the investment banking and brokerage firm, is underwriting the cost of the event, which Linowes estimates at between $75,000 and $100,000.

Unlike the Kennedy Center Honors, which are given for lifetime achievement in the arts, or the annual Helen Hayes Awards, which acknowledge a wide spectrum of accomplishment in local theater, the Will Award is intended to recognize an actor, producer, designer or director specifically for his work with the classics. The honor will not be restricted to American artists. "That would preclude too many people who have made America more aware of classical theater," Linowes said. "An award like this could go to an Englishman like Sir Laurence Olivier. Or Americans like Joseph Papp or John Houseman."

Candidates for the first award will be proposed by a nominating committee consisting of actresses Jane Alexander, Zoe Caldwell and Gloria Foster; and John Andrews, deputy director of the Division of Educational Programs at the National Endowment for the Humanities. The final selection will be made by the theater's National Advisory Committee, which includes such performers as Alexander, Foster, Tom Hulce, James Earl Jones, Christopher Plummer and Michael York. The first winner will be announced in January.

The Will Award carries no remuneration, but the recipient will be presented with a statuette at the March gala. Three prominent American sculptors -- William Calfee, John Dreyfus and Phyllis Hammond -- have submitted designs for the statuette, and the Shakespeare Theatre expects to commission one of them today.

The Will Award is part of continuing efforts by Linowes and the board to shape the Shakespeare Theatre's image as a national resource. The theater already has established an exchange program with the University of South Carolina in Columbia, which allows university students to apprentice at the Shakespeare Theatre while company members lecture and perform at the university. Linowes said similar programs are being developed with the University of California.

He also indicated that a search is under way for a larger facility to house some of the company's productions. "We'll always keep the Elizabethan theater at the Folger Library as our home base," he said. "But we'd like to find and develop a bigger theater where we could perform, say, two of the four productions we do a season." About 60 percent of the theater's growing budget -- $2.4 million this year -- comes from box-office revenues. Seating only 253, the existing auditorium is increasingly seen as an economic liability.