BOSTON--Gov. Michael S. Dukakis yesterday signed into law the Gay Civil Rights Bill, extending basic civil rights to gay and lesbian citizens and bringing to an end a 17-year-old stuggle in Massachusetts state politics.

The new law prohibits discrimination based on sexual orientation in employment, housing, credit, and public accommodations. It amends an anti--discrimination statue that already prohibits discrimination in these areas on the basis of race, religion, national origin, sex, or age.

During a bill-signing ceremony in the State House, bisexuals, gays and lesbians joined lobbyists and legislators in celebrating the successful conclusion of their long battle.

"It is a historic day for Massachusetts," said Gov. Dukakis. "Our state is once again in the forefront of efforts to extend civil rights protection to all," he said.

Airline Isaacson, co-chair of the the Massachusetts Gay and Lesbian Political Caucus, the major lobbying organization for the bill, emphasized the victory as proof that the gay and lesbian community "can continue to win in political and legislative arenas."

"We have not come to the finish line, just the first lap," said Steven Tierney, the group's other co-chair, drawing attention to domestic partnership legislation and health care bills regarding AIDS that are under consideration.

Massachusetts joined ranks with Wisconsin as it became the second state in the nation to enact gay rights legislation. Ten other state legislatures are considering gay rights legislation, including Connecticut, Vermont, and New Jersey.

Originally drafted and introduced in 1973, the bill had passed in the House in 1983 and 1987, but had been thwarted both times in the Senate by strong opposition making skillful use of Parliamentary tactics.

Last March, the bill passed once again in the House by a narrow vote of 76--72. After vigorous legislative struggle, the Senate last month passed the bill for the first time by a vote of 24--14.

"This is a victory not only for human rights but also for spirited debate and internal democracy in the legislature," said Sen. Michael J. Barrett '70 (D--Cambridge), who co--sponsored this year's bill with Rep. Mark Roosevelt (D--Boston).

During the ceremony, Governor Dukakis said that the Massachusetts Commission Against Discrimination (MCAD), the state agency responsible for investigating cases of discrimination, "is ready to begin enforcement of the new law."

Opponents of the bill had argued that the MCAD would not be able to handle the influx of new cases that would result from the approval of the legislation.