President Reagan, reacting to the continuing controversy about the use of cluster-type artillery shells in Lebanon, has indefinitely suspended all U.S. shipments of such ammunition to Israel, the State Department said yesterday.

Reagan's decision, detailed in a formal, classified letter sent to Congress late Monday, extended the president's action of July 19 when he put a hold on the scheduled transfer to Israel of 4,000 155mm shells of the so-called "cluster bomb" category.

The president's move came after a governmental review of Israel's response to U.S. requests for information about use of the shells in Lebanon. Although Israel has denied it broke agreements restricting use of U.S.-supplied cluster units, the still-secret review is understood to have concluded that some violations of the classified agreements did occur.

However, State Department spokesman Dean Fischer stressed that the suspension of shipments represented "a policy decision by the president" and is "not a legal determination" that Israel violated the 1976 and 1978 agreements. In general, these agreements are known to limit use of the weapons to targets away from civilians, or in situations where Israel is confronted by a major war involving one or more Arab countries.

Cluster-bomb units, which can be either aerial bombs or shells fired from artillery, break apart and spread scores of tiny shrapnel-producing "bomblets" over a wide area. Although intended for use against military forces, they can cause a high civilian toll if used in areas where military units are mingled with the population.

Since the June 6 outset of Israel's drive against Palestine Liberation Organization forces inside Lebanon, there have been charges that Israel used the weapons indiscriminately to cause substantial civilian casualties. These charges caused widespread criticism of Israel in this country, and during Israeli Prime Minister Menachem Begin's visit here last month questions about their use helped provoke an angry confrontation between him and members of Congress.

After repeated U.S. requests for information, Israel contended in a recent formal reply that it used the cluster weapons only against military objectives. But the letter also reportedly admitted that some of the Palestinian guerrilla units were concentrated in populated areas.

The administration notified Congress last week that, in the Lebanon incursion, there "may have been a substantial violation" of U.S. law governing use of American-supplied weapons, which are supposed to be restricted to internal security and national and regional self-defense.

However, it is considered unlikely that either the executive branch or Congress will pursue the matter to the point of seeking a wider cutoff of U.S. arms and military equipment to Israel. Fischer refused to answer questions about whether the administration is reluctant publicly to find Israel in violation of the cluster munition agreements, and on the broader subject of whether other U.S. arms were used for nondefensive purposes, he said the U.S. investigation is continuing.

The United States has not sent cluster bombs of the type dropped from airplanes to Israel since 1975 but until now had continued to supply the Israelis with cluster-type artillery shells. However, the Israelis have a large stock of the shells and also have the capability to manufacture some types of cluster ammunition.