At the West Otago Community Board meeting on Wednesday, member John Herbert said the project was moving ahead, and boxing work was due to start early this month.
Mr Herbert said it was intended to place the war memorial about 5m from the Kelso flood memorial at the site of the former West Otago township. The project has been estimated to cost about $7000.
The council has set aside $2000 from its war memorial repairs budget for the new war memorial and was also granted a building exemption from the council.
The proposed concrete war memorial would be almost 2m high and would reproduce the names of those on the Kelso honours board - all those who served and the fallen. There are nearly 100 names from Kelso.
Mr Herbert said he hoped the memorial could be unveiled on Anzac Day.
The idea was brought to the board's attention last March and members agreed to speak to the West Otago community to gauge whether there was public support for it. The idea has received support from the RSA and Kelso residents.
Board chairwoman Barbara Hanna said the Kelso memorial was a ''very exciting'' project.
Relatives of those who left Kelso to serve in World War 1 or World War 2 have also expressed their support, with even some North Island people contacting Mr Herbert.
After a ''100-year flood'' swept through Kelso in 1978, the town was rebuilt, only to be abandoned after another flood struck in 1980.
