Officials of the District and several other metropolitan jurisdictions signed a regional agreement yesterday to undertake a $300 million expansion of the Blue Plains sewage treatment plant and to establish procedures for protecting the water quality of the Potomac through the year 2010.

The agreement, which includes plans to construct an incinerator at Blue Plains to dispose of sludge, was hailed by the seven local officials who took part in the signing as an example of cooperation between local governments and a tool to end the long-running disputes over sewage treatment between the city and its suburban neighbors.

"We don't have to worry about sewer moratoriums or other disputes that have divided us in the past," said Mayor Marion Barry during a ceremony at the office of the Metropolitan Washington Council of Governments.

Others who took part in the signing were Montgomery County Executive Charles W. Gilchrist, Fairfax County Board Chairman John F. Herrity, Montgomery County Council Chairman Michael L. Gudis, Prince George's County Executive Parris N. Glendening and Jesse L. Maury, chairman of the Washington Suburban Sanitary Commission. Prince George's Council Chairman William B. Amonett also signed the agreement but was not present at yesterday's ceremony.

Prior to the agreement, the surburban governments had sought to avoid building expensive new treatment facilities and wanted expanded capacity at Blue Plains, in Southwest Washington. The District government, in turn, wanted an outlet to dispose of sludge produced at the plant and some assurance that it could buy sewage treatment capacity back from the suburbs if waste water production exceeded projections.

Under the new agreement, the Blue Plains treatment capacity would be expanded from 309 to 370 million gallons per day over a six year construction period.

Each jurisdiction would share in the cost of improvements based on their previous investments and allocated capacity in the expanded plant. The jurisictions are eligible for a total of $250 million in federal construction grants. The Environmental Protection Agency had warned that local jurisdictions might lose those funds if they failed to reach an agreement.

The agreement also includes:

*A locally funded program to continue monitoring the water quality of the Potomac.

*An agreement by Fairfax County and the Washington Suburban Sanitary Commission to reduce their reliance on Blue Plains beyond the year 2010.

*Improvements to manage up to 80 dry tons of sludge per day at the Montgomery County Composting Facility or at other sanitary commission facilities.