PCs David Bulleyment, Eric Renshaw and Colin Ross, WPC Lillian Sullivan and WPS Elizabeth Burton all lost their lives when their vehicle overturned in the Newton Hill area of Wakefield in May 1978.
The coach had been carrying the officers and dozens of their colleagues to a Police Federation conference in Blackpool. Another 23 were injured.
Provided the scheme gets planning permission, Wakefield Council has indicated it intends to build a lasting tribute to the five officers on the site.
That proposal has received wholehearted backing from the West Yorkshire Police Federation, who are keen to ensure their departed colleagues are remembered.
Federation chairman Brian Booth said: "We have been talking to the council about this and we think it's a fantastic idea. We're fully supportive of it.
"We don't know exactly what the design of it will look like at this stage but the Police Roll of Honour Trust is likely to be involved with that side of things. They've done projects like this before and if they have anything to do it with it, it will look very good.
"It's absolutely the right thing to do to remember them. It was a massive tragedy and it's important we recognise the contribution of those officers to society."
An inquest into the deaths of the officers, whose ages ranged between 31 and 45, later heard that the coach's brakes had failed.
Discussing the proposed plans at a council Cabinet meeting on Tuesday morning, Councillor Matthew Morley said it was right that the officers be "honoured" with a memorial.
How Wakefield Express covered the tragedy in May 1978
The Express' May 19 edition, published four days after the accident, reported that investigations into the crash were ongoing and likely to take several weeks.
Although there were early indications that faulty brakes may have been to blame, the newspaper said safety concerns had been repeatedly expressed about the roundabout since it had opened in 1973.
It was said that four lorries had overturned on the roundabout in the 13 months prior to the fatal accident. Local residents were set to take a petition to the district council, lobbying for changes to be made to the road layout.
In its comment piece for the week, the Express said that the way a motorway link road fed into the roundabout made it "virtually a T-junction", and suggested that the island itself was too big and signage was "inadequate".
It wrote: "The whole country recoiled in shock and horror when the news bulletins came out on Monday.
"A ghastly coach crash in Wakefield had taken the lives of five police officers, two of them women.
"A massive wave of sympathy went out to the families and colleagues of the victims and with it the inevitable question, "How did it happen?"
"Experts have lost no time in trying to find out, but there is a strong body of local opinion that the answer is not far to see.
"To them, it lies in the construction of the Newton Hill roundabout, which they they claim is conducive to accidents."
Local Democracy Reporting Service