The 10ft-high monument in Smethwick, West Midlands, depicting a Sikh serviceman carrying a rifle, will pay tribute to the thousands of troops from India who fought and died for Britain between 1914 and 1918.
Smethwick's Guru Nanak Gurdwara has appointed Black Country-based sculptor Luke Perry to create the Lions of the Great War statue.
As well as honouring Sikh soldiers' role in the First World War, the statue will commemorate the sacrifice made by service personnel of all faiths from the Indian subcontinent in both world wars and subsequent conflicts.
Mr Perry said: "I am incredibly proud to be working on a sculpture that is, at its heart, a statement of gratitude for the actions of a people who gave their lives for our independence when they had not yet achieved their own.
"It will be a striking and permanent marker of the richness of our community and that those who have been under-celebrated are finally getting the recognition they deserve."
The sculptor's previous works include an acclaimed statue in Stockport honouring Royal Marine James Conway, who was killed during a commando raid on occupied France in 1942.
The Lions of the Great War statue will be sited between High Street and Tollhouse Way, where Sandwell Council plans to work with the gurdwara to create a paved public space with seating and lighting.
The statue will stand on a 6ft granite plinth with inscriptions naming the regiments in which South Asian soldiers served.
These will also explain the importance of the statue for Smethwick's long-established South Asian community.
An adjoining green space, which includes a memorial celebrating inventor James Watt, who pioneered steam power in Smethwick, is also set to be refurbished with new landscaping to complement the statue and public space.
The gurdwara is covering the cost of designing and building the tribute.
Its president, Jatinder Singh, said: "These men volunteered to serve and fought to defend the freedoms we enjoy today.
"The memorial will ensure that this part is never forgotten. So I am delighted Guru Nanak Gurdwara Smethwick is commissioning the statue and will ensure its success."
Sandwell Council leader Steve Eling said: "I am very proud that Smethwick - a place where many people from the Indian subcontinent have made their home - is paying such a striking tribute to the very important role played by South Asian service personnel during times of conflict.
"I hope this contributes to the growing recognition of the sacrifices that servicemen from Commonwealth countries have made for our country."