G. D. Searle & Co. announced yesterday that it no longer will sell its intrauterine devices in the United States, effectively ending the availability of the controversial IUDs for a million American women who use them for birth control.

The devices were the last heavily prescribed survivors of the IUD era. The company attributed the sales halt to "the escalating cost" of defending increasing numbers of "unwarranted" users' lawsuits, saying the litigation "has made future product-liability insurance virtually unobtainable."

Searle estimated that one million American women use its two IUDs, sold under the trade names CU-7 and TATUM-T, and that physicians prescribed between 300,000 and 400,000 of the devices in 1985.

Searle's action leaves the U.S. market for IUDs to Alza Corp.'s Progestasert, which is unique in releasing progesterone, a contraceptive hormone, into the uterus. Alza said it sells about 100,000 Progestaserts a year.

Alza recommends replacement of the Progestasert annually, and Searle advised that its devices be replaced every three years. As women now using the Searle devices have them removed over time, they will have to choose the Alza device or some other form of birth control.

Searle, owned by Monsanto Co., said it will continue to sell the IUDs in 94 other countries -- mainly Canada, Britain, Australia, France and West Germany -- but said that foreign sales are relatively small and that it is "looking into the possible sale of its non-U.S. IUD business."

Starting about 20 years ago, millions of U.S. women began to use IUDs, partly because of studies that disputed assumptions that contraceptive pills almost were without risk.

Doubts about IUCs began to arise in 1974, when the Dalkon Shield first was linked to life-threatening pelvic inflammatory disease (PID), which usually impairs or destroys the ability to bear a child. A. H. Robins Co. halted U.S. sales of the shield in June 1974. Since then, the shield has been linked to thousands of PID cases. Other manufacturers also have stopped selling once-popular IUDs such as the Lippes Loop and Saf-T-Coil.

A recent jolt to public confidence in IUDs came last April, when two studies provided the first direct evidence that young childless women are twice as likely to become infertile if they use the devices as women who never use them. The evidence showed the risk to be lowest with the Searle devices and highest with the shield.

"Searle has full confidence in the safety, efficacy and medical utility of the CU-7 and the TATUM-T when used in accordance with Food and Drug Administration prescribing information," Vice President Tod R. Hullin told a Chicago news conference yesterday.

The FDA upheld Searle, terming the current professional and consumer labeling "adequate to inform physicians and patients of the potential risks of the products."

Faye Wattleton, president of the Planned Parenthood Federation of America, said that "we are dismayed" by Searle's decision. Only three months ago, her organization "reaffirmed its position that the IUD remains a safe and effective method of contraception for most women," she recalled.

But Roger L. Pardieck, a Seymour, Ind., lawyer who has spent years investigating the CU-7 for suits against Searle, said he was "delighted" by Searle's decision, although saddened that it hadn't come earlier.

"Even Searle's experts admit today that an IUD is not suitable for the young woman who has not borne a child but wants to do so someday. The only suitable market is the woman who wants an alternative to surgical sterility."

The "worst feature of the whole damn thing was that they chose the segment of the market that was most susceptible to injury and would suffer the greatest harm," Pardieck said. At times, as many as 40 percent of the U.S. users of the Searle IUDs were such women, another source said.

"Thousands of women have been injured by this product the CU-7 , which was not developed in accordance with standards of practice in the pharmaceutical industry," Pardieck said. "They did not do adequate animal testing" and "ignored clear warnings from their own people that further animal testing was needed."

The FDA said, "Essentially . . . Searle had reported the data properly . . . In our judgment, Searle did not mislead FDA."

The agency also said that current users "do not have to have their IUDs removed as a result of the company's discontinuing U.S. sales," and recommended that "women with questions about their IUDs should contact their physician or health clinics."

Roger P. Brosnahan, whose Minneapolis plaintiffs' law firm has examined thousands of Searle documents under court seal, said, "No one can deny that, of all the contraceptive methods known . . . only one is associated with an increased risk of PID. And Searle has never told this to physicians or women."

Searle spokesman William I. Greener Jr. rejected allegations of impropriety and said they had "absolutely no bearing" on the decision to halt sales. He said the defense of a recent CU-7 suit in Baltimore cost Searle $1 million, or about 9 percent of Searle's revenue from U.S. sales of the devices last year. Greener said that 1985 sales of both IUDs accounted for only $11 million of Searle's $600 million in pharmaceutical sales.

The jurors deadlocked after three days of deliberations, causing a mistrial.

Searle said that it faced 775 IUD suits, that 470 have been resolved, that one-third of the 470 were dismissed or disposed of without payments by Searle, that all but 10 of the remainder were settled to hold down legal costs, and that plaintiffs won only two of the 10 suits that went to trial.