Built in the 1870s, the locomotive was once used as a gasworks shunting engine (1904-49), moving coal wagons around an extensive gas-production complex, part of which became the Dunedin Gasworks Museum.
An agreement in principle has already been reached to return A66 from storage in Southland back to Dunedin, to be used as a static display at the gasworks museum.
Work would continue behind the scenes to make that move a reality, respective organisers said this week.
Since 2000, the locomotive, which is disassembled and no longer in working order, has been at Mandeville, northwest of Gore, at the Waimea Plains Railway Trust’s rail facilities.
The engine is on lease from its owner, the Otago Railway and Locomotive Society, which operates the Ocean Beach Railway, at St Kilda, Dunedin.
Southern Heritage Trust founder and gasworks museum board member Ann Barsby said bringing A66 back was a "brilliant" development.
"It will be a huge drawcard, with tremendous public appeal," Mrs Barsby said.
"It’s another link in the chain with the gasworks", and of coal being used in the gas manufacturing process, she said.
The locomotive was initially owned and operated by New Zealand Railways (1875-1904), and was later displayed at the railway-themed Carnarvon Station restaurant, where it was damaged by fire in 1988.
The engine was later displayed at Middlemarch (1990-2000).
Otago railway society secretary Grant Craig said it had already been agreed that the lease arrangement with the Waimea trust would end when the trust began leasing another steam locomotive.
It was a "positive" move to bring A66 back, and it was fitting that it be displayed at the gasworks, Mr Craig said.
Waimea trust chairman Colin Smith said it was hoped to move A66 via road, on a low-bed transporter truck, and also to bring a another steam locomotive from Ashburton south to Mandeville.
