Shropshire Council's cabinet members voted to look into a £100 million water management scheme that could be built alongside Shrewsbury's North West Relief Road in an online meeting yesterday.
An alternative proposal to build a dam further upstream will also be researched, as leaders look to stop a repeat of the catastrophic River Severn flooding seen earlier this year.
Concerns have been raised by some communities over how both proposals could negatively affect their economies and the environment.
However, council leader Peter Nutting insisted this is still early in the process.
Councillor Nutting said: "I do think we need to explain that these are the early stages of the report. We want to explore where we can go with this.
"I do think we should speak to the Welsh Assembly to see what can be done on the Welsh side of the border. The further upstream we can keep the water, the better."
The decision follows a report by Shropshire Council’s director of place, Mark Barrow, which warned the consequences of failing to address the flooding problem now could be severe due to the expected rise in river levels of 0.85 metres within the next 30 years.
It said: “In that context and left unaddressed, future flooding events could affect many thousands more properties, businesses and communities not previously affected.
“In that sense relying on the measures currently in place and taking an ad-hoc localised approach to river defences is not sustainable.”
It added that both the NWRR and dam proposals needed further research, hence the Shropshire Council cabinet vote.
“Both options require more detailed ground investigation work to determine suitability," said the report. "At this stage a holistic development with the NWRR is the preferred option.”
The report also highlighted the financial cost of not tackling flooding.
It said February's floods cost the county around £1 million a day in gross value added (GVA) impact, as well as causing millions of pounds in infrastructure damage.
Shropshire Chamber of Commerce research suggests only a third of the county’s businesses were able to operate normally during the floods.