The memorial viewed from Station Road with the city walls in the background; the memorial was originally to abut the wall but the design had to be modified after it proved controversial.
At a meeting in February 1920 the NER's board voted to allocate £20,000 to the memorial project rather than seek donations from the company's workforce, and commissioned Lutyens to design it. Lutyens' commission was confirmed in October 1921, for a fee of £700 plus out-of-pocket expenses. The NER's deputy general manager explained that Lutyens had been chosen because he was "the fashionable architect and therefore could do no wrong".
The project became embroiled in a controversy surrounding its size and location, which grew to envelop the proposed York City War Memorial. Following the railway company's lead, the City War Memorial Committee also appointed Lutyens, and endorsed his plan for a Stone of Remembrance elevated on a large plinth in the moat by Lendal Bridge, 100 yards (90 metres) from the proposed site of the NER's memorial. The controversy revolved partly around the relationship between the two memorials—Lutyens felt that the two designs would complement one another, but the city had given Lutyens a budget of £2,000, a tenth of that allocated to him by the NER, and some members of the local community were concerned that the railway company's memorial would be much larger and would overshadow the city's. Another concern, raised by a city councillor, was that visitors walking into the city centre from the railway station would see the NER's memorial first. Lutyens responded that he felt the two memorials would show a common purpose, and thus that their proximity was not an issue.
The issue was further complicated by the proximity of both proposed schemes to York's ancient city walls; both schemes required the consent of the Ancient Monuments Board (later English Heritage and now Historic England), particularly as Lutyens' design for the NER involved the memorial abutting the city walls and would have required excavation of part of the ramparts, to which the Yorkshire Architectural and York Archaeological Society (YAYAS) strenuously objected. The NER's in-house architect suggested moving the memorial ten feet (three metres) to the east, away from the wall; Lutyens, in India at the time, dismissed the idea in a cable. In February 1922, the secretary of the YAYAS, Dr William Evelyn, gave a lecture in which he was severely critical of the NER's proposed memorial. He told his audience "I think it is an enormous pity that they cannot find room in which to place a sacred emblem commemorative of the patriotism, bravery, and self-sacrifice of our own soldiers of the twentieth century and that it should be considered necessary to deface and despoil another sacred emblem". The City War Memorial Committee and representatives of the NER met with Charles Reed Peers, the Ancient Monuments Board's chief inspector, at the NER's offices on 8 July 1922, in preparation for which the NER erected a full-size wooden model of their proposed memorial. Peers approved the city's scheme, noting that its proposed location was in fact a newer structure and not part of the walls' ramparts, but requested that Lutyens submit a revised design for the NER's memorial to move it away from the wall. Lutyens acquiesced but observed that the modifications would require a reduction in the size of the screen wall and thus in the size of the names to be listed on it, which he felt was detrimental to the scheme. He submitted the revised designs and they were approved in October 1922.
The remaining issues were largely resolved after the city relented to public pressure and opted to site its memorial on a plot of land off Leeman Road, just outside the city walls, and for a reduced scheme in the form of a cross due to a shortage of funds. Coincidentally, the land was owned by the railway company and the NER board donated it to the city in a mark of gratitude for the good relations between the company and the city; the NER had by that time been amalgamated into the London and North Eastern Railway (LNER) as a result of the Railways Act 1921.