Junior Foreign Office Minister Tobias Ellwood said the location would be decided after consultation with families of victims.
But he said the fact that many of the victims were from the North meant it made sense to locate the memorial in that part of the country.
Meanwhile, in a separate move, a memorial for British victims of terrorism overseas is to be created at the National Memorial Arboretum in Staffordshire. Mr Ellwood –whose brother Jonathan died in the 2002 Bali bombings – said: “This has been in the planning for some time. We want to dedicate a memorial to the victims of overseas terrorism.”
The attack in Sousse in Tunisia 2015 was the worst incident of terrorism involving British citizens since the 7/7 attacks in London. The victims included Chris and Sharon Bell, from Leeds. Mr Ellwood said families of the victims were in favour of a memorial and that a site in the North seemed to be a favoured option.