A proposed annexation agreement between Fredericksburg and Spotsylvania County officials will be reviewed next week by the Virginia Commission on Local Government, which will then recommend whether the plan should be accepted by a three-judge panel.

The commission, which also will conduct a public hearing on the proposal Wednesday night, will analyze an agreement reached last month that gives the City of Fredericksburg about 4 1/2 square miles of adjacent Spotsylvania County. The agreement also provides for the sharing of water and sewer services between the city and county.

The review by the advisory commission begins at 9 a.m. Monday in the Spotsylvania County Courthouse in Spotsylvania. The proceedings conclude with a public hearing at 7 p.m. Wednesday in the auditorium of Courtland High School, at the intersection of Routes 628 and 208 in Spotsylvania County.

The proposed annexation calls for extending Fredericksburg city limits one mile west along Virginia Rte. 3, north to the Rappahannock River. The city would assume a proportion of the existing county debt, pay Spotsylvania for public improvements in the annexed area and also pay the county for two years for its loss of tax revenues--about $1.2 million.

Fredericksburg officials requested the annexation last fall in an effort to regain sales tax revenues and real estate taxes from businesses moving outside the city limits. The city originally wanted to annex six square miles of the county, an area including the prosperous Spotsylvania Mall.

Spotsylvania officials opposed the annexation attempt. But after several months of negotiations, officials from the two jurisdictions reached an accord that gives the city 4.631 square miles but provides the county immunity from any further annexation by the city for the next 25 years, according to Michaux H. Wilkinson, executive director of the Commission on Local Government, a state advisory board. The county's current size is 411 square miles, he said.

The acres ceded to Fredericksburg do not include the Spotsylvania Mall, which Wilkinson described as the area's "commercial jewel." The city does acquire two smaller shopping malls in the proposed annexation, however, and gains 2,800 residents, Wilkinson said.

If the agreement is approved by the local government commission and no major challenges are filed by the public, the plan will be presented to a special three-judge panel in Spotsylvania County.

"Unless someone intervenes with major objections, the prospects are good that the court could put its blessing on the annexation," Wilkinson said. The annexation is scheduled to occur Jan. 1, 1983.