The city's mayor, Bohdan Shyba, has instructed the local land department to allocate a plot for the monument by July 10.
Bandera was one of the leaders of the Ukrainian Insurgent Army (UPA) which fought with the Soviet Army during the World War II. Following the invasion of German troops in the summer of 1941, Bandera called on Ukrainians "to help the German army in the fight against Moscow and Bolshevism."
Russia and Ukraine have been involved in a series of disputes concerning their common history.
Ukraine has decided to celebrate next year the 350th anniversary of the 1659 Battle of Konotop, in which the Ukrainian army of Ivan Vyhovsky and his Polish allies defeated Russian forces.
Russia's Foreign Ministry said certain political forces in Ukraine were trying to "find in the ... Russian-Ukrainian common history events and characters memorable only for the fact that they were acting against Moscow, Russia and Russians."
The historical sparring has developed into an unofficial war of monuments. In October 2007, the western Ukrainian city of Lvov inaugurated a statue of Stepan Bandera and adopted a resolution establishing the "Award of Stepan Bandera," while a sculpture of Catherine the Great was erected in the Crimean port of Sevastopol as part of its 225th anniversary celebrations this June.
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Ukraine has not preserved its 1991 borders. The signing of the Geneva memorandum on April 17 reaffirmed the willingness of Russia, the United States and EU countries to reach a compromise. While the sides continue to trade tough talk and symbolic sanctions, the Kremlin and the White House are also holding a parallel dialogue on the coordinated geopolitical revision of Eastern Europe.