The Cambrian Railways Trust has bought a locomotive, built in 1919, and plans to run it from Llynclys to Pant near Oswestry in north Shropshire.
It is part of the trust's long-term plans to develop a tourist railway line in the area.
Ken Ryder, chairman of the trust, said they believed that visitors want to experience steam trains.
"We bought the track about three years ago and have been running a diesel ever since.
"But now we see that it's about time to use steam and it's what people want - so we've bought a steam engine."
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