The two heads, on the Forth and Clyde canal at Grangemouth in central Scotland, would rock back and forwards to displace water from a lock chamber, allowing boats to move to and from Scotland's lowland canal network.
The project has secured the £8M funding necessary and will be looking to appoint consultants in the new year.
"It works on an archimedes principle," explained project manager Crawford MacCalman of Professional Project Management.
"The kelpie sits on a pontoon which is hinged on one end and there is a hydraulic ramp on the other. When the Kelpies move, water is pushed out of the ponds they sit in and into the lock."