Helpers at Whitchurch Museum & Archives received the grant from the Heritage Lottery Fund to explore the ways people communicated in the War.
The project will focus on a Great War Communication Exhibition at Whitchurch Heritage Centre and the creation of a Whitchurch First World War website.
The exhibition will be centred on a full-sized replica of a telegraph wagon and will explore the use of Morse code, flags, pigeons and dogs as methods of communication.
A radio station will operate at specified times and various workshops will be made available to the public on Morse code topics.
It is planned that Whitchurch Heritage Centre, where the museum and archived are based, will become the depository for First World War research relating to the town and its surrounding areas.
Individuals, families, groups and schools will be encouraged to deposit their studies which can be in the form of paper records, photographic evidence or electronic copies.
A dedicated website www.thegreatwar.whitchurch-shropshire.co.uk will be set up to act as a hub to allow information to be shared with the wider public.
It will include photo galleries and a facility to post queries as well as a list of planned, current and proposed research projects.
The project also includes recording War memorial inscriptions relating to individuals from the town and surrounding villages.
Drop-in coffee mornings will be arranged in and around Whitchurch where people will be able to share their family memories and take advantage of a free high-quality scanning service to copy fragile letters and documents relating to the War.
Volunteers will collect photographs, newspaper clippings, documents, letters and photos of keepsakes, as well as family tales passed down to help them build a clear picture of what life was really like.
With help from professionals, the information gathered will be digitally recorded and an online interactive archive will be created where everyone can access, contribute and discuss information.
Dr Judith Hoyle, volunteer curator, said: "We are thrilled to have received the support of the Heritage Lottery Fund and look forward to starting this exciting project."
Reyahn King, head of Heritage Lottery Fund, said: "Bringing the theme of communication into the modern age the project will provide an opportunity for local people to contribute to the creation of a digital legacy of life in their community during the First World War."