Council chiefs are keen to create a new venue to host shows, as well as conferences and exhibitions.
A site has not been chosen yet as officials want to see if there is support for the proposal and then plan to search for a location.
Somewhere close to Dudley town centre could be an option, to continue the regeneration of the area and take advantage of improved transport links with the West Midlands Metro to be extended to the town.
Consultants will be brought in to focus on making the venue a reality. Most shows in the borough are held at Dudley Town Hall, Stourbridge Town Hall or Brierley Hill Civic Hall.
Alan Lunt, deputy chief executive at Dudley Council, said: “We hope that our study generates some interest and proves that there is a viable future for such an exciting development, but we are yet to look at the detail of where such a venue could be built.”
It comes as a decision on the future of Dudley Hippodrome is expected in the new year.
Council bosses favour building a new arena from scratch rather than trying to rescue the Hippodrome. A community-led bid to rescue the famous venue failed last year.
A final decision on whether to allow the Hippodrome to be used as a base for driverless vehicle technology is expected in the new year.