Virginia Gov.-elect Gerald L. Baliles said yesterday he will oust the state's controversial highway commissioner, Harold C. King, and replace him with the director of a legislative watchdog committee, a move that some legislators say may force dramatic changes in one of the state's most powerful agencies.

Northern Virginia officials praised the appointment of Ray D. Pethtel, 48, who has headed the Joint Legislative Audit and Review Committee for 12 years, saying it could bring significant benefits to the Washington suburbs and other rapidly developing areas of the state.

Pethtel played a key role last year in rewriting the state's highway funding formulas, a step that funneled a greater share of road money into populous areas of the state, including Northern Virginia.

"He's putting an objective man at the head of the Highway Department," said state Sen. Clive L. DuVal II, a Fairfax Democrat and leader of the Northern Virginia legislative delegation. "King was just power-oriented for the commission."

DuVal said that Baliles' appointment is "telling the Highway Department . . . not to try to be a little empire in state government." Northern Virginia officials for years have criticized King, a former federal highway administrator named to the state's top highway position seven years ago by Republican Gov. John N. Dalton.

The officials have said the Highway Department is too protective of its power and out of touch with the state's changing transportation needs, a complaint increasingly echoed in other sections of the state.

Some urban legislators blamed the Highway Department and King for trying to block the legislative efforts to change the allocation of road money away from old formulas that favored rural areas where major highway projects have been accepted with little opposition.

Funding of the state's transportation needs is expected to be one of the most explosive issues in the General Assembly, which opens its 1986 session Wednesday.

King, who will become a consultant to the Highway Department on federal highway matters, could not be reached for comment yesterday.

Neither King's nor Pethtel's salaries were announced yesterday.

Pethtel, who resides in the Richmond suburbs, said, "Baliles assured me that highways will be a hot topic of interest in his adminstration."

Although Baliles labeled transportation matters as one of his top priorities during his campaign for governor, he has not yet revealed whether he will submit plans to the legislature this year for dealing with highway and mass transit funding.

"I think it signals a new beginning by the Baliles administration to redefine the direction and focus of Virginia's transportation needs," said state Sen. Charles L. Waddell (D-Loudoun), chairman of the Senate Transportation Committee. "It will be approached on a broader basis than in the past, with more emphasis on mass transit."

Pethtel worked closely last year with Vivian E. Watts, a Fairfax County delegate who recently was named secretary of transportation and public safety, in developing the new state road money formula that sparked a war between urban and rural legislators. The highway commission, long controlled by rural representatives, fought many of the changes.

Watts said yesterday that Pethtel's appointment "was in the discussion stage" before she accepted her cabinet seat last week. She said Baliles discussed the appointment then, but it wasn't a condition of her taking the job and she didn't "have any real say in it."

Gov. Charles S. Robb, who leaves office Jan. 11, made numerous changes in the state government during his four years in Richmond, but one area he did not address was the Highway Department. Some members of his administration had said that whether King was reappointed would be a signal of whether Baliles wanted to tackle the issue.

"Baliles is saying in effect: 'Keep your paws out of the General Assembly, I'm putting in here the fella who pushed the formula to which you objected last year,' " said DuVal.

Pethtel's appointment was one of a number of appointments announced by Baliles yesterday. The others included:

Maria (Keech) LeGrand, 37, as deputy secretary for administration. A native of Holland, with a bachelor's degree from the University of Michigan, she currently is deputy secretary for commerce and resources.

Michaux H. Wilkinson, renamed executive director of the Commission on Local Government.

J. Westwood Smithers Jr., 40, director of the Department of Information Services. A native of Richmond, he has been a senior assistant attorney general.

In the Department of Commerce and Resources:

John W. Daniel, 36, deputy secretary for resources. He is now deputy director of Baliles' transition office and special assistant to the attorney general.

Curry A. Roberts, 28, deputy secretary for commerce. He was finance director of the Baliles' campaign and is staff co-director for the inaugural committee.

Carol A. Amato, renamed commissioner, Department of Labor and Industry.

David Hathcock, 39, director, Department of Commerce. He has been director of information and program for the attorney general.

Karen F. Washabau was renamed deputy secretary for Finance.

In the Department of Human Resources:

Maston T. Jacks, 38, deputy secretary for Human Resources. He has been deputy attorney general.

Bernard L. Henderson Jr., 35, director of health regulatory boards. He has served as director of the Department of Commerce.

William L. Lukhard, renamed commissioner, Department of Social Services.

Ray T. Sorrell, renamed director, Department of Medical Assistance Services.

Addison E. Slayton Jr., renamed state coordinator, Office of Emergency Services.