Ironbridge and Coalbrookdale Civic Society has been working to restore the Bartlett Drinking Fountain to Ironbridge Square for some time.
Now the society says the plan has passed a major hurdle, with Telford & Wrekin Council saying its own surveys of the square have shown that the plan is possible – and can go ahead.
The news means that the society is moving on to its next step, raising the £40,000 needed to carry out the work of physically returning the fountain to the square.
A GoFundMe page has already been set up by the society's vice chairman, Margaret Ann Roberts, and the group is also set to pursue a number of other funding opportunities in an effort the make the project a reality.
The drinking fountain was put in the square as a tribute to The Reverend John Bartlett, who brought fresh drinking water to Ironbridge in the 1800s – saving countless lives in the process.
It was built with his wife, Susannah's authorisation after his death in 1861.
The fountain remained at the site until some time in the 1960s when it was removed as changes were made to the square to make space for bus bays.
Since then it has been at Waterloo Street Car Park.
Viv Moore, chairman of Ironbridge and Coalbrookdale Civic Society said they were delighted at the step forward for the plan - and thanked the council for its work on making sure it is viable.
She said: "It has been a very long journey but the council has worked very hard on this and we are thrilled to be told it is possible to bring the fountain back and now we have to raise the funds for it if we possibly can."
Mrs Moore spoke of the historical significance of the monument and what it represented.
She said: "The Rev John Bartlett was the vicar of Buildwas and he found that the people of Ironbridge were dying of cholera and different diseases because they were drinking the river water, so he piped clean water into Ironbridge and saved countless lives, and when he died his wife put the fountain there in his memory."
Mrs Moore said the project would be bringing back the vital history of what is already a World Heritage Site.
Ironbridge's borough councillor, Carolyn Healy, has also welcomed the progress on the project.
She said: "I have been fully supportive of the project since its inception. Last year I was able to contribute some of the Councillor's Pride Funding to the cost of the ground investigations to check the viability of the project.
"And now we have got that go-ahead that it is possible it is just a case of raising the funds to move the fountain back.
"It is a fantastic project, it is another piece of history of the gorge, moving the fountain back to its original location and allowing visitors to learn more about the history of bringing fresh water to the town."
Councillor Healy said that the return of the fountain would also serve another purpose – helping toward the town's environmental ambitions to become plastic free.
She said: "We want to have plastic free status and having a water fountain where people can fill up water bottles would fit perfectly. It will celebrate the heritage but will also have a very good effect on the environment."
People can support the fundraising online at gofundme.com/f/return-bartlett-fountain-to-ironbridge-square