A parliamentary inquiry will test the public mood about redeveloping the Australian War Memorial's World War I galleries, including the historic dioramas depicting grim battle scenes.
Some of the dioramas, such as the depiction of Lone Pine, pre-date the memorial's Canberra building and were originally installed at the Melbourne site.
The memorial wants to bring the galleries up to standards demanded by the public, noting the layout is confusing to visitors as well as being poorly lit and not conforming to building standards.
The public works committee said on Friday it would conduct a public hearing early next year on the $32 million project, in accordance with legislation.
Earlier this year The Canberra Times was first to report that Prime Minister Julia Gillard would commit the money for the project as part of the Anzac Centenary Program 2014-2018.
Ms Gillard reassured the service community the heritage-listed dioramas would be carefully preserved.
The grant will allow the memorial to rearrange the display to put the handmade scenes in chronological order.
The memorial will also use the money to upgrade the entire gallery and introduce computer-based interactive programs.
In its submission to the inquiry, the memorial says the World War I galleries in their current form have ''inefficient lighting … [and] a confusing narrative lacking geographical and chronological order''.
Veterans Affairs Minister Warren Snowdon has been made the Minister Assisting the Prime Minister on the Centenary of Anzac to ensure the commemorations are given priority.
He believes the refurbishment of the World War I galleries will be a fitting tribute to the 400,000 Australians who served in that theatre.
The main building of the war memorial was completed in 1941 but it was not until 1971 that the eastern and western wings were added, finally allowing room for adequate display of World War II material.
The dioramas date back to the beginning of the memorial.
One, titled Somme Winter, depicts a trench located west of Gueudecourt, showing the grim conditions in which Australians fought and lived.
The small funk hole, roofed by duckboard and covered with a waterproof sheet, is where the men mostly slept during winter.
The dioramas were first suggested by official war artist Will Dyson and official war historian Charles Bean, to give a more vivid impression of war than conveyed through photographs and paintings.
The memorial says the dioramas were designed to create an emotional account of the experiences of Australians who fought in the First World War.
The First World War galleries are one of the last remaining areas to be redeveloped at the memorial, with work expected to be complete by the end of 2014.