The population of Washington, continuing a sharp decline fell last year to 690,000, its lowest level since 1940, according to new U.S. Census Bureau estimates.

The census bureau said the number of city residents on July 1, 1977 was down 10,000 from a year earlier and down 67,000 from the 1970 census.

Since 1970, the bureau said, the District's population has dropped by 8.8 percent. About 92,000 more people have moved out of the city during he past seven years than moved in, he census said, for a net out-migration of 12.1 percent. At the same time the city had 25,000 more births than deaths.

Washington's population loss is comparable to that of other large older cities in the North and Midwest, although the estimate for the District is a year more up-to-date than the census figures for the same time as estimates for the states.

Marianne Roberts, the statistician in charge of preparing the new report, said she expected that Washington's population might have leveled off last year because of the much-heralded boom in inner-city real estate, but instead the estimates showed that the decline continued without let up.

"It may be that if people are moving back to the city, it is very small families who are coming back," Roberts said, "while large families are continuing to leave."

The new census report also shows very slight population growth in Maryland - up 14,000 from mid-1976 to mid-1977 - and a more substantial increase in Virginia - up 83,000 from 1976.

Overall, the population of the United States grow by 1,663,000 last year, the census bureau said, to 216.3 million. Virtually, all the growth occurred in the South and West. Indeed, five eastern states lost population last year - Massachusetts, New Jersey, New York, Pennsylvania, and Rhode Island. The drop in New York was 129,000.

The figures are estimates based on several complicated formulas using birth and death statistics, schools enrollment reports, and data on income tax returns. Social Security recipients, and immigration.

Although the census bureau estimates do not give a breakdwon by race, figures for 1976, prepared by the D.C. government, indicate that the city's white population has started to increase slightly after two decades of major decline while the black population has dropped since 1973. The city government report indicated that most of the white newcomers are single adults and childless couples, while the number of school-age black children has fallen markedly.

City officials said other reasons for the District's continued population decline are the sharp drop in births compared to the 1960s; the virtual end of migration from rural areas in the South, and the accelerated movement of black families from the city to the suburbs since the passage of openhousing laws.

Gan Ahuja, the District government's chief demographer, said the population loss may possibly be beneficial for the city because the propertion of young people, who require schooling and are likely to commit crimes, has gone down. On the other hand, the city's potential work force, age 18 to 64, has increased.

The 1977 estimate of 690,000 is more than 112,000 below Washington's peak population of 802.178 reached in 1950. By 1960 the city had 763.956 people but the population remained almost steady until 1970, when the recent sharp decline began. The last time the population here was lower than it is now was 1940 when the city had 603.091 people.

The new census report estimates that Maryland's population last year was 4,139,000 - 5.5 percent more than in 1970, while Virginia's population of 5,135,000 was 10.4 percent above its 1970 figure. During the 1960s Maryland grew substantially faster than Virginia.

Officials said Maryland's recent slowdown is in line with the experience of other states with large urben industrial areas, like Baltimore, while Virginia is sharing in the growth spurt of the South.

Since 1970, Florida, Texas, and California have had the country's largest population increases, although recently growth in Florida has slowed.

West Virginia, whose population fell in the 1960s, grew by 27,000 last year and by 115,000 since 1970 or 6.6 percent. Census bureau officials said the turnaround was caused mainly by the boom in the coal industry.