NEW YORK (AP) _ PaineWebber Inc. has announced an agreement under which its transportation group, which provides investment banking services to the airline and aerospace industry, will become a separate corporation that will retain ties to the Wall Street firm.

As part of the agreement, PaineWebber will provide about 32 percent of the new corporation's $10 million in equity capital and will work jointly with the Transportation Group on public offerings, placements of high-yield, or ''junk bond,'' securities, and other transactions for the airlines and aerospace industries, officials said Sunday.

In 1988, PaineWebber's transportation division completed 50 transactions representing more than $3 billion in financing for 27 clients worldwide, PaineWebber said in a statement.

''Through this entity there is a real opportunity to expand our client base and revenue stream,'' said Joseph J. Steuert, chief executive officer of the new group. Steuert has been a managing director of PaineWebber and director of its transportation group since 1984.

Steuert said he and the approximately 20 other PaineWebber employees who decided to form the new company wanted the opportunity to invest their own funds in the transportation group.

He also said they were motivated by the desire to enter investment areas that are not part of the traditional businesses of PaineWebber, such as fund and money management for institutional investors.

PaineWebber is one of Wall Street's largest investment firms, with both individual and institutional clients.

Last month, PaineWebber reported sharply lower earnings for the fourth quarter of 1988 and for the year as a whole. It said the results reflected a slowdown in the financial markets and one-time costs.

The company's fouth-quarter profit was $512,000, down 93 percent from the $7 million in the same period of 1987. For all of 1988, profit dropped 41 percent to $42.4 million, compared with $72 million in 1987.

Revenue for 1988 totaled $2.51 billion, up from $2.44 billion in 1987.

The company said it would continue a program to boost profitability by reducing support staff, consolidating offices and shrinking marginal businesses.

A company spokesman could not be reached Sunday to comment on the Transportation Group agreement.