Chasewater Railway, based at Chasewater County Park, is re-conditioning the 1970s Moyse engine for Tata's Hartlepool Pipe Mill.
Those at the railway, which has been in existence for more than 50 years, will do all of the electrical and mechanical work that is needed for the engine to work again.
There is a shortage of locomotives left in the UK, and Christian Hatton, a mechanic who volunteered to restore it, has previous experience with such engines.
He said: "We have done work on quite a few locomotives now. We've done three so far and there should be four more to do.
"There is a real shortage of locomotives in the UK. Moyse, the company who manufactured them, went out of business.
"We picked the engines up with very little information left for us.
"We have been reconditioning the old engines because of how the train industry has taken off over the last few years. We think we have found a real niche in the market."
Mr Hatton is not just proud of the job that they do with the locomotives but also with all that they do in their workshop.
"We cater for odd jobs that nobody else can really do," he continued. "If you bring something to us there's a good chance we will be able to fix it.
"We've been here for over 50 years now so we have a lot of knowledge on the subject."
Chasewater Railway operates heritage steam and diesel trains on Sundays and Bank Holiday Mondays throughout the year, as well as most Saturdays from Easter to October and certain weekdays throughout the summer.
The railway operates passenger trains from its headquarters at Brownhills West to Chasetown Church Street, with the four mile round trip taking around 45 minutes.
For more information visit www.chasewaterrailway.co.uk, call 01543 452623 or email firstname.lastname@example.org