A federal judge today banned construction of the controversial, multibillion-dollar Westway highway and development project for Manhattan's West Side.

New York Gov. Mario M. Cuomo immediately said the state would appeal the ruling.

A coalition of environmental groups and mass transit advocates called the decision a major victory. The group has opposed the 242-acre, six-lane underground highway plan since it was first proposed in 1974 as a replacement for the crumbling West Side Highway.

"Today's decision is a tremendous victory for the straphangers of this city and for all of us who have long fought against this billion-dollar boondoggle," said Carol Bellamy, the City Council president and a mayoral candidate.

In his decision, U.S. District Court Judge Thomas P. Greisa also said he would issue a permanent injunction prohibiting the Army Corps of Engineers from granting crucial landfill permits and blocking federal funding for the project.

Westway would consist of a 4.2-mile highway on the lower West Side, a 93-acre park and 100 acres for residential and commercial real estate development. Much of the project would be built on 169 acres of new landfill in the Hudson River. Estimates of its cost have ranged from $4 billion to $10 billion and construction was expected to take at least 10 years.

Greisa found that the studies used by several federal agencies, including the Environmental Protection Agency and the Army Corps of Engineers, to approve Westway were "inadequate and arbitrary" and did not consider the effect the proposed landfill would have on the Hudson River's striped bass population that spawns in the river's warm shallow waters.

"It is the court's conclusion that two failures to justify the Westway landfill and federal funding for Westway under the applicable legal standards should bring the matter to an end. There is simply no legitimate purpose to be served by further proceedings," Greisa wrote in a 132-page opinion.

But Cuomo said that "nothing in the trial court's decision disputes the fact that Westway would be an enormously important public improvement. We do not believe Judge Griesa will be sustained on appeal."

Critics of the project urged Cuomo and Mayor Edward I. Koch to divert $1.7 billion federal funds earmarked for Westway to New York City's deteriorating mass transit system. They argued that an appeal may jeopardize the possibility to trade in funds, since that deadline is Sept. 30.