The bill will be heard during the 2006 session of the General Assembly.
"Our nation was founded on the principles found in the Ten Commandments, Nelson, a Democrat from Middlesboro, said. "If we want future generations to grow up with a healthy respect for the law and our Christian traditions, we must preserve the Ten Commandments."
Last month, the U.S. Supreme Court issued two rulings concerning the Commandments.
The court ruled in a case from Pulaski County that the Ten Commandments should be removed from the county courthouse.
The justices ruled public officials, by posting the Ten Commandments in the courthouse, sought to advance a particular religious faith which is in violation of the separation of church and state.
In a case from Texas, the Supreme Court ruled the outdoor presentation of the Ten Commandments along with other monuments on the Texas State Capitol grounds did not amount to an unconstitutional government promotion of religion.
Nelson said placing the Ten Commandments on public property is historic in nature and harkens back to the founding of the United States.
"We need to make it clear that local governments have the power to post the Commandments for everyone to see," Nelson said in a statement. "Our founding fathers included their respect for God in the Declaration of Independence, the Constitution all of our founding documents. The Ten Commandments are a vital part of American legal history, and they must be preserved."
If approved by the Kentucky House of Representative and the state Senate, the proposal would be open for a referendum by commonwealth voters in the November 2006 elections.
In an unrelated move, four Kentucky congressmen are backing a proposed constitutional amendment that would allow religious symbols on public property.
Kentucky Republican representatives Ed Whitfield, Ron Lewis, Geoff Davis and Hal Rogers are four of over 100 co-sponsors of the proposal called the Religious Freedom Amendment, which would allow religious displays in schools.
If approved by both houses of Congress, the amendment would have to be approved by two-thirds of states before becoming part of the U.S. Constitution.