A national competition will be held to design the centenary paving stones which will be placed in areas of the UK where Victoria Cross recipients of the First World War were born.
There will be 28 stones unveiled next year to commemorate medals awarded in 1914, and other stones will be unveiled each year up until 2018.
Communities Secretary Eric Pickles, announcing the competition, said: "Laying paving stones to mark these Victoria Cross heroes will ensure that there is a permanent memorial to all the fallen who fought for our country."
He added the stones would "help residents understand how their area played its part in the Great War, and ensure memories of that sacrifice for British freedom and liberty are kept alive for generations to come."
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