WASHINGTON (AP) _ Martin Marietta Corp. said Monday that it will purchase General Electric Co.'s aerospace business for more than $3 billion to create the world's largest aerospace electronics company.

''The defense budget is clearly declining, and the industry must consolidate,'' said Martin Marietta chief executive and chairman Norman R. Augustine. ''The companies that do consolidate early will be the survivors.

''There is room for strong survivors,'' Augustine said. ''There is no room for weak companies.''

But after the announcement, two debt-rating agencies, Standard & Poor's and Moody's Investors Service placed Martin Marietta's senior debt and commercial paper on review for a possible downgrade.

Standard and Poor's said the debt-financed acquisition would materially increase financial risk in $470 million of Martin Marietta debt, but that its rating was unlikely to fall more than one category. Any downgrade could make it more expensive for Marietta to borrow money.

S&P reaffirmed its ratings on General Electric Co.'s senior debt and commercial paper, reflecting GE's superior business position.

Wall Street, however, was enthusiastic.

In trading on the New York Stock Exchange, General Electric was up $2.12 a share to close at $82.12 1/2 . Martin Marietta was up $5.62 to close at $63.25.

In the deal, Fairfield, Conn-based General Electric will receive cash and $1 billion in convertible preferred stock in Martin Marietta. The Bethesda, Md.-based company will expand its board of directors by two members to be nominated by GE and supported by Martin Marietta's management.

GE Aerospace is a major supplier of satellites, radar and sonar systems, simulation and communications systems and other aerospace and defense systems. Products include missile guidance systems and warship radar systems.

It also has a contract to help the Pentagon design the Star Wars missile defense system and space-based missiles to protect the United States from missile attack.

The purchase marks the latest in a series of moves by big defense companies to adapt to smaller military budgets in light of the end of the Cold War. Some companies have cut workers in response to a slowdown in orders while others have sold off divisions.

Two weeks ago, Calabasas, Calif.-based Lockheed Corp. said it was laying off 500 workers, partially in response to cuts in the F-22 advanced fighter plane program. Lockheed employment had already declined 14 percent in two years, its president said at the time.

General Dynamics plans, over the next four years, to cut in half the 13,000-member workforce at its Groton, Conn.-based Electric Boat Division, which makes submarines. Early this month, the Falls Church, Va.-based defense conglomerate announced the sale of its Electronics Manufacturing Center in Fort Worth, Texas, which builds equipment for the F-16 aircraft.

Pratt and Whitney, the Hartford, Conn.-based jet engine maker, is in the midst of cutting 4,800 workers.

George Podrasky, a securities analyst at Duff & Phelps in Chicago, said each major defense company is developing its own strategy to deal with the decline in the defense budget.

''Martin Marietta has been interested in acquisitions and has tried to get LTV Aerospace (earlier this year) and did not succeed,'' Podrasky said. ''I think if your sole or dominant focus is defense, then acquisition can make sense for you.''

The two companies, however, characterized the deal as a merger.

''This will be the largest aerospace electronics company in the world with unmatchable reach, reputation and resources of no other,'' said John F. Welch Jr., president and chief executive officer of GE. ''While GE Aerospace is a world-leader in technology, it is one of several. So we looked for a business combination that could make us unique ... not just survive but to boldly move in the direction of global growth.''

The executives said a task force will recommend in no more than six months whether jobs need to be eliminated.

However, Welch said he was certain that a Burlington, Vt., facility, which designs and manufacturers aircraft armament and mobile air defense systems, would remain intact because it is so unique.

With the addition of the GE operations, Martin Marietta's annual revenues will nearly double, approaching $11 billion, including about $3 billion in sales from commercial and civil government customers.

GE's aerospace division had revenue last year of $5.3 billion, nearly as large as Martin Marietta's total 1991 revenue of $6.1 billion.

Profit on GE's aerospace division was $655 million last year, more than twice Martin Marietta's corporate profit of $313.2 million.

Asked why the deal was structured as announced rather than the other way around, Welch said that decision was reached after it became ''clear that Martin Marietta was in no way for sale.'' The negotiations lasted six weeks, officials said.

Martin Marietta currently employs about 57,000 people, virtually all located in the United States. GE Aerospace has about 37,000 employees.

The sale already has been approved by both boards of directors but is subject to government review and approval by Martin Marietta shareholders.

The transaction is expected to close in the first half of 1993, the companies said.