The block of Forest stone from which the sundial will be carved has at last been located at Birch Hill Quarry, Fetter Hill, near Coleford.
It will be built into the south porch of the church which occupies a glorious location and is the highest in the Forest.
A faculty to enable the work to be carried out has been applied for, said the Rector, the Rev Cliff Davies.
Local historian Andrew Gardiner said the sundial was a major project for the village and everyone was very pleased with the parish council, under its chair Vicki Meek, for the funding.
The design will include two of the features for which St John's is famous, the two sculptures of fish believed to date from the 12th century and its Elizabethan bell.
Mr Gardiner said siting the sundial was a crucial operation.
"The British Sundial Society is helping with the calibrations which are quite intricate and yet most interesting. They have told me this is the only known sundial being erected over this year of Royal celebrations," said Mr Gardiner.
The inscription will read: LUX UMBRA DEI – Under the shadow of God.
Mr Gardiner said that as well as being remembering the Jubilee Year the sundial would be tribute to the men who worked in the stone industry in the Forest.
•The Review is following the progress of the stone block from quarry to completion when it casts its first shadow at St John's.