At the West Otago Community Board's meeting on Wednesday, member John Herbert said the project was moving ahead, and he hoped it could be unveiled by Anzac Day next year.
Mr Herbert said two signwriters had been asked for quotes, and plans and ideas would be taken to the board and the West Otago branch of the Gore RSA as they developed.
The idea was brought to the board's attention in March and members agreed to speak to the West Otago community to gauge if there was public support for it.
The idea has received support from the RSA and Kelso residents.
Relatives of those who left Kelso to serve in World War 1 or World War 2 have also expressed their support, with some people from the North Island contacting Mr Herbert.
The Kelso-Glenkenich area was quite big "in its day", he said.
In the 1960s and 1970s, Kelso had a population thought to be near 300. It had a three-teacher primary school, shops and hotels, and a railway line ran through the centre of town.
It also had a large rural centre with saleyards, a Presbyterian church, a telephone exchange and a town hall.
Two big floods in the space of two years sealed the township's fate.
The "100-year flood" of 1978 swept through Kelso but the town was rebuilt, only to be wiped off the map when another flood struck in 1980.
After the clean-up in 1980, government agencies and local catchment boards prevented any further building in the flooded area and Kelso ceased to exist.
The Kelso honours board was hung alongside the Heriot honours board in the Heriot Community Centre after the township was officially abandoned in 1981.
The proposed war memorial would reproduce the names of those on the Kelso honours board - both the fallen, and those who served.
There are nearly 100 names from Kelso.
At this stage, it is proposed the war memorial be placed near the Kelso flood memorial.
