The Maryland State Board of Education voted yesterday to require all public school students to pass a reading examination testing their ability to understand street signs, job applications, directions and other material before they can graduate from high school.

All entering ninth grade students will take the 45-minute test in October. Those who fail will be offered remedial reading, and will have the opportunity to take the test eacy year until they past it, even after they have completed the 12th grade.

The Maryland board's decision means that by 1982 no student attending public high school in the Washington suburban area will be allowed to graduate without passing a test designed to ensure that he or she has obtained a miminum competence in reading. Virginia students entering the 10th grade this fall will have to pass tests in both reading and mathematics before graduation. The District of Columbia schools are "moving in that direction, according to a school official, but have set no date for the tests.

Fourteen states had adopted minimum competency tests as of last May, while 36 states required testing at some level between kindergarten and high school graduation.

The Maryland reading test has been used in state high schools for the past three years as a way of identifying students in need of remedial work.

A typical section of the exam might require students to read a short paragraph of directions lifted from the label of a common household item, then answer several multiple-choice questions about it. Students must answer 80 percent of the tests' questions correctly to pass.

Last year, 93 percent of Maryland ninth grade students took the test, and 74 percent passed, according to state figures. Eighty-nine percent of 11th-graders in public high schools took the test and 89 percent passed.

In addition, students who read adequately but have "a school history of being unable to perform paper-and-pencil assignments' may demonstrate their competence in alternate ways to a panel of three school staff members and be certified for a diploma, according to the new state rule.

However, all such alternative testing methods developed by local schools for special cases will have to be approved by State Superintendent David Hornbeck.

The reading test will eventually form one part of a battery of examinations students will have to pass to graduate from Maryland high schools.

Under guidelines for the complete revaluation program, passed last month by the state Board of Education, students will be required to demonstrate knowledge of practical mathematics, government, health and safety practices, communications and social behavior practices and job skills - in addition to reading - before receiving a diploma.

The next area in whch students will be required to demonstrate minimum skills, is mathematics. The state's math program is expected to be prepared for the 1979-80 school year, according to Assistant State Superintendent Richard Petre.Others will be instituted in succeeding years, subject to final approval by the school board, Petre said.

Each state testing program in Maryland is accompanied by extensive curriculum guides outlining the basic skills each student should master.

Since the reading program began three years ago, the numbers of seventh and 11th grade students rated as competent in reading have risen significantly.

Only seventh and 11th grade students were tested in the initial two years of the program. Ninth grade students were tested for the first time last year.

During the 1975-6 school year, 20 percent of the 11th grade students who took the test failed, according to state figures, compared to 11 percent last year.

In the seventh grade, where a less difficult reading test is administered, the percentage of students failing the test has declined from 35 percent three years ago to 28 percent last year, state figures show.

Last year, 89 percent of ninth grade students in Montgomery County passed the test, and 95 percent of 11th-graders passed. In Prince George's County, 72 percent of ninth grade students and 86 percent of 11-graders passed, the state said.