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Brown scored 279 goals in 720 appearances for the Baggies in a career spanning two decades.
Albion, in a media statement, said: "The club contacted Tony in August 2011 to inform him his record-breaking achievements would be suitable for a lasting tribute.
"Tony responded very positively to the proposals and the club has held several meetings with him since to move the project forward.
"The club will continue to work closely with Tony and is confident, when the time is right to reveal the plans, that all West Brom fans will regard the tribute fitting for a great player and a great man."
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