The metal sculpture will show two fists overlapped in the style of the song's "horse-riding" dance move.
It will be erected outside the COEX shopping centre, where part of the video was filmed.
Gangnam Style was released by South Korean singer Psy in 2012 and remains the most-watched YouTube video ever.
It has been viewed more than 2.4 billion times.
Gangnam tourism director Park Hee-Soo said he hoped the statue would "become a landmark for our district".
"Tourists can take pictures under the statue and the song will play automatically when you stand there," he added.
A statue dedicated to the South Korean music hit Gangnam Style is to be unveiled in the Seoul district made famous by the song.