The Environmental Protection Agency awarded the District of Columbia yesterday $5.7 million to begin building a sludge-composting facility at the Blue Plains sewage treatment plant. Construction of the new facility could solve one of the Washington area's most difficult regional problems.

For years, Washington, Maryland and Northern Virginia politicians have squabbled over what to do with the 600 tons of sludge produced daily at Blue Plains, a regional sewage plant that treats two-thirds of the area's waste.

As the result of yesterday's award by EPA, a composting facility will be built to turn the sludge into organic mulch, thereby eliminating the current practice of hauling the sludge 36 miles to Upper Mintgomery County to be buried.

The sludge-hauling method of disposal is expensive - its costs about $35 a ton - and politically sticky, because some citizen groups have traditionally opposed the location of sludge disposal facilities in or near their communities.

Sludge is the semisolid residue that is left after sewage is treated.

The $7.2 million composting plant is to be built on a 25-acre site in the Oxon Cove area of Prince George's County, which is directly across the highway from the Blue Plains plant," near the county's border with the District.

It will be the largest facility of its kind to be built in the nation, officials said yesterday. In addition to quelling arguments over sewage disposal, it could also raise revenue if some of the mulch produced can be sold commercially.

Rep. Herbert Harris (D-Va.), chairman of the House District Submmittee on regional affairs, who played a key role in getting the composting plan approved, called yesterday's action "an environmental milestone for the Washington area and the nation."

Mayor Walter E. Washington praised the regional cooperation that had gone into gaining approval for the plant, and added that it could reduce the city's budget by nearly $5 million a year - the amount it costs to haul and bury the sludge.

Fifteen acres of the land on which the plant will be built are owned by the National Park Service. The remaining 10 acres are owned by the District and currently used as an automobile impoundment lot.

The sludge-composting method, which has been done experimentally with a small portion of Blue Plains waste, calls for mixing the sludge with wood chips and then withdrawing air from the mixture. This raises the temperature of the mix to about 170 to 180 degrees, causing it to decompose. In 14 to 21 days, the mixture becomes a usable organic material containing nitrogen, phosphorous and potash.

Jean B. Levesque, director of the D.C. water resources plant management administration, which operates Blue Plains, said it will cost about $10 to $15 a ton to compost the materials. After composting, the mixture can be used as to enrich soil. "Once we develop a market for it," Levesque said yesterday, "we're going to sell it."

EPA's decision to finance the project is particularly important for Blue PLains because its daily treatment load has been expanding in recent years.

Within the next 10 years, it is estimated that Blue Plains will be producing nearly 2,000 tons of sludge a day - triple its present output.

Area government officials had hoped to handle some of that increasing load by building incinerators in which to brun the sludge. IN 1975, however, EPA delayed plans to build such incinerators at Blue Plains, saying the construction could be too costly and might use too much energy.