Douglas Borough Council said the floodlit fabric flower would replace previous planted versions as a "permanent tribute".
A council spokesman said a war memorial on the site would also be restored and 100 metallic poppies for the town would be placed around the town.
More than 8,200 Manx men served during WW1, of which 1,165 lost their lives.
A plaque at the site will be unveiled during a short service in November in the run up to Armistice Day on 11 November.
More about: World-War-One Armistice-Day
