Metro transit officials, at the urging of the District government, have tentatively selected a seven-acre tract at the foot of Capitol Hill in Southeast Washington for a $43.8 million replacement garage to store and service about 250 buses.

That price, discussed yesterday at a Metro board committee meeting, is regarded as extraordinarily high for such a facility and suburban Metro board members requested that the authority's staff study alternative locations or solutions to the problem. The cost is high because of the midtown location of the proposed garage.

The land lies north and west of the intersection of New Jersey Avenue and I Street SE. It is in a rundown neighborhood, cut off from the Capitol by the Southeast Freeway and the Capitol power plant. But it is only about a three-minute walk from the chic row houses southeast of the Capitol.

The new garage would replace an antiquated, overcrowded facility at Half and M Streets SE that Metro has been trying to get out of for years. The M Street garage is to be demolished as part of the city's Capitol Gateway redevelopment project, which is to be centered on the new Navy Yard subway station. That station, on the Green Line to Anacostia, is scheduled to open in 1986.

"That garage has to go," D.C. Transportation Director Thomas Downs said. ". . . From our standpoint it is unacceptable to expect that the benefits of subway station development go to Friendship Heights and Bethesda and not to poorer communities as well."

At the same time, the District would like to keep a bus garage in the same general neighborhood as the one to be replaced because it is close to the routes the buses serve. Lower fuel and labor costs result and that means the District saves money on its Metro subsidy.

If the garage is not replaced, Metro officials say, it will have to be substantially rehabilitated. "That garage is a horror for our employes," Metro General Manager Richard S. Page told the committee yesterday.

In selecting the new site, Metro and District government officials have found a plot of land that may be unique in the city: within walking distance of the Capitol Navy Yard but neither much used now nor scheduled for development.

Most of it was owned by the bankrupt Penn Central Railroad. It contains a little-used railroad siding, a few sheds and a warehouse. On the east, across New Jersey Avenue, is a municipal trash-collection plant. On the south and west are the shabby little factories, abandoned dwellings and trash-strewn lots characteristic of the area south of the freeway.

Metro engineer John Patterson said an "environmental impact statement" on the proposed site is being prepared and should be ready for submission to Metro's board of directors in about two months. According to Albert J. Roohr, Metro's director of systems and service planning, no steps toward acquisition of the site of financing the purchase would be made until after the board approves it. If necessary, he said, Metro could then acquire the land through its power of eminent domain.

Technically, the New Jersey Avenue site is only one of several under consideration. But Metro officials said it was likely to be the one they recommend to the board. Finding sites for bus garages is a perennial headache for Metro because such facilities are generally not considered community assets. They increase traffic, generate noise and air pollution, and create a demand for parking for the bus drivers' cars.