The West Australian Government released a tender for a $125,000 memorial on Perth's glamorous Elizabeth Quay development over Christmas.
But families of the MH370 victims, two thirds of whom were Chinese nationals, have united to appeal to the Prime Minister and WA Government to shelve the idea.
They claim the proposal for the memorial site has come too soon, is in the wrong location, and more importantly has not involved their consultation.
Jiang Hui, 44, who lost his mother aboard MH370 and acts as a spokesman for the families of Chinese victims, said monuments carry huge symbolic meaning in China.
"The establishment of such monuments usually takes place only after the matter has come to an end. But so far we don't know where our relatives are and where the plane is," he said.
Sher Keen, president of Aircrash Support Group Australia, an organisation that supports air crash victims and their families, sent a letter protesting the Perth memorial to the Prime Minister just before the new year.
Ms Keen said Malcolm Turnbull is yet to respond and the victims' families are demanding answers.
"They just can't see the sense in placing a memorial there and placing a memorial there now," Ms Keen said.
Texas company to resume search for wreckage
A new search for the wreckage of MH370, which disappeared over the southern Indian Ocean in March 2014, is due to start on Wednesday.
Rather than the governments of China, Malaysia or Australia, the new search will be carried out by Ocean Infinity, a Texas outfit of sea-search experts using eight underwater drones.
It is understood Ocean Infinity will sign a contract on Wednesday to receive a bounty payment of up to $90 million if it is successful within 90 days.
"If we can find the specific location of the aircraft in the next search operation, I believe the three governments can provide very strong support," Mr Jiang said.
Mr Jiang hopes the abandonment of support for the Perth memorial will not be seen as ungracious, but simply a reminder MH370 is not a lost cause.
He said a promise made by former prime minister Tony Abbott in May 2014 during an interview with Chinese state media CCTV should be upheld.
"Tony Abbott made it clear that plans for building a monument would involve the three governments of China, Malaysia and Australia and the families of victims working in comprehensive consultation," he said.
"I hope the Australian Government will abide by the official's promises."
The ABC contacted the office of Deputy Prime Minister Barnaby Joyce as well as the WA Premier for comment.