Agriculture Secretary John R. Block is severing his ties with an Illinois business partner whose financial problems may have posed a threat to Block's farming business, officials said yesterday.

Block's partner, John W. Curry of Galesburg, Ill., moved to file for bankruptcy this week after an Iowa judge appointed a receiver to take over Curry's assets in that state.

"The partnership is in the process of being dissolved," John Ochs, Block's press secetary, said yesterday. "It was a mutual decision which benefited both parties."

"They both wanted to get divorced," said Barry Barash, Curry's attorney. "Curry couldn't operate effectively with Jack Block as a partner. Too much publicity. It's like being the president's son."

One official close to Block said the agreement, which is expected to be made final in days, would insulate the secretary from Curry's liabilities. But Barash said the two men's financial fortunes remain intertwined.

Block has cosigned a number of loans with Curry and a third partner and remains liable for those notes, which may become entangled with Curry's Chapter XI bankruptcy proceeding, according to Barash.

The Block-Curry partnership has been widely publicized because of Curry's financial troubles, his splashy method of buying up farm land and his receipt of a $400,000 loan last year from the Farmers Home Administration (FmHA), which Block oversees. Curry defaulted on the low-interest loan earlier this month.

Block has said he knew nothing about the FmHA loan and would not benefit from it. An FmHA spokesman said the agency is delaying action on Curry's default pending outcome of a lawsuit on how to distribute Curry's 1984 crop income to creditors.

Block, who owns a 3,000-acre hog and grain farm in Illinois, jointly owns property in Illinois and Minnesota with Curry and other partners. The secretary has maintained that he has no financial interest in Curry's prosperity.

But under the complicated terms of one of Block's mortgages from the First National Bank of Minneapolis, the bank is empowered to seize part of Block's property if some of Curry's farming operations failed.

Curry has agreed to pay $250,000 to Block and a third partner to withdraw from the jointly owned properties, which have a negative value because their liabilities exceed their worth, Barash said.

The Community Bank of Galesburg, saying that Curry owes it $731,325, sought a court-appointed receiver this week after Curry said he would not be able to pay all his creditors.

The government loan to Curry drew heavy criticism at a time when other hard-pressed farmers could not obtain FmHA help or were required to post large amounts of collateral. Curry was required only to pledge his 1984 crop income to secure the loan.