New Times magazine, an award-winning biweekly news magazine with a national circulation of 350,000 yesterday announced that it will fold at the end of this year, shortly after its fifth anniversary.

The death of New Times comes despite continually growing advertising interest in the publication - this year it ran 615 pages of advertising, 9 percent over 1977.

New Times editor Jonathan Z. Larsen said the magazine had been hit with sharply increased costs, particularly postal increases, and falling readership.

"People used to read about politics and national affairs," Larsen said. "Now they are into golfing and Cheryl Tiegs - and that's just not where we're at."

Larsen said, "The readers were harder and harder to come by. Even some of our oldest and most faithful were abandoning us. Our renewals were way down.

"We finally just took a hard look at the numbers and realized that all of the indicators were going the wrong way," Larsen said. He added that he, publisher George Hirsch and associate publisher Nick Niles had reached their own decision on ending publication, and presented their case to MCA Corp., the parent company.

In a highly unusual situation, it was the corporate parent that was put in the position of agreeing that the case for continuing was hopeless, Larsen said.

Publisher George Hirsch said the magazine was hit with two postal increases this year, each raising postal costs about $1 million. That represented a 68 percent jump in postal costs for the magazine, which is top-heavy in mail subscriptions. An estimated 320,000 of New Times sales are by mail subscription, while only 30,000 are sold on the newstands.

"We didn't want to shift around and take something superb and let it deteriorate," Hirsch said of the decision to close down. "I just don't think this magazine ought to be an aging ball-player scampering around trying to catch easy flies."

He said the reading market for investigative reporting, for which New Times was known, is breaking up. He added that "people are living lives for themselves."

Hirsch said that another magazine venture he began with MCA. The Punner, is doing very well since its inception three months ago.

The Runner has increased its circulation base from 20,000 to 85,000 since September, and is put out by some of the same people who work on New Times. It is geared to readers inter in the outdoors as well as running and jogging.

New Times earned its repuation by being first on many stories and more in depth than other publications on other stories.

The magazine boasted the only jail-house interview with William and Emily Harris, the accused kidnapers of Patricia Hearst. It also reported the racial slurs that eventually led to the resignation of Earl Butz, then the secretary of Agriculture.

And it was New Times that investigated the murder conviction of Peter Reilly, a young Connecticut man accused of murdering his mother. After the New Times story came out, a new investigation lead to the verdicts being overturned in the case.

In its latest issue, scheduled to hit the stands today, the magazine published a detailed investigation of Synanon, the California-based drug rehabilitation center.