After more than a year of design competitions and meetings with federal agencies, a master blacksmith from Rochester, N.Y., has won approval to construct 300 cast-iron benches and 700 tree grates and tentative approval for 600 tree and pedestrian lilghts for Pennsylvania Avenue.

They are just part of the thousands of pieces of "street furniture" that soon will line the nation's main street between the Capital and the White House.

The $1.4-million blacksmith contract is unusual because the federal government rarely spends a year -- as the National Endowment for the Arts did -- searching the nation for ironmongers and then holding a design competition among the top three to see who can make the best tree grate, bench and lamp post.

The three finalists were paid $5,000 each to present designs for clusters of benches, lights and grates. Two, Albert Paley of Rochester and Phillip Baldwin of Arizona, were paid an additional $2,000 this spring for additional work before Paley's art-deco-style metal work was chosen by the Pennsylvania Avenue Development Corp (PADC). Paley's designs were approved last week by the National Capital Planning Commission. On Tuesday, the Fine Arts Commission gave its aesthetic blessing to the bench and grate but asked Paley to go back to the drawing boards on the street light, which the commission felt looked too much like an ordinary highway light.

The other improvements to Pennsylvania Avenue -- which in three years will turn it into an American Champs Elysses -- already are complete in some sections, though they are difficult to see in the busy maze of construction around 14th and Pennsylvania.

Western Plaza, a giant open square between 13th and 14th streets that features an inlaid stone design of the original L'Enfant Plan of Washington, is almost finished. An all-day city festival will be held Nov. 1 to celebrate the plaza's official opening.

Across 14th Street, Pershing Square also is nearing completion. To open in December, it will feature an outdoor ice-skating rink (to be a reflecting pool in summer), cafe-kiosk and statue of World War I Gen. John J. ("Black Jack") Pershing. While the plaza will be open, Pershing Square will be surrounded by grassy hillocks of trees. w

North of the new plaza and square, buildings are being demolished to make way for an expanded and restored Willard Hotel and, across the street, a new 800-room Marriott Hotel and office building, part of which will be built over the National Theatre and will be completed in 1982 and 1983.

South of the square and park, however, passersby already can see what the avenue's new "streetscape" will look like: brick sidewalks and crosswalks, double rows of willow oak trees -- the wider north sidewalks will have triple rows of oaks -- all interspersed with eagle-topped lampposts and high, arching street lights.

Three kinds of street lights will illuminate the broad avenue and sidewalks when the PADC completes the street's renovation in 1984: the traditional Washington street lamps, but with an eagle perched on top; tall roadway lights and the tree and pedestrian lights approved this week. All will be energy-efficient, metallic vapor lights that will provide a less orange color than the present sodium vapor lights on the avenue, according to PADC staffer Rita Abraham.