The Duke of Wellington's allied forces of British, Dutch, Belgian and German soldiers beat Napoleon Bonaparte's men in June 1815.
It ended a 20-year conflict that will be depicted at the exhibition to include a commemorative medal, soldiers' diaries and newspaper archives.
The museum will tell the stories of local men who fought in the battle plus the wider contribution the area's ironworks are believed to have made through supplying cannon to allied troops.
Mike Tanner, vice chairman of Pontypool museum, said volunteer researchers spent months looking through newspaper archives to find out about more than a dozen soldiers whose stories had not been told for generations.
"What's amazed me is that some of the families followed their husbands to Waterloo and some of the wives and children were actually on the battlefield," Mr Tanner said.
"We've found a case of a local lady who was heavily pregnant, who went to find her husband who was wounded on the battle field.
"He'd lost his arms but survived, then she was injured and survived, so part of their daughter's name was 'Waterloo'."
Simon Allen, a re-enactment volunteer with the 23rd Royal Welch Fusiliers Regiment of Foot, who will be featured in the exhibition, said many people were unaware of how intense the battle was.
He said: "It's known by most people - the Duke of Wellington, the Battle of Waterloo - there's so many things named after it.
"Some people can remember the second war, quite a horrendous time, but this [Waterloo] ended more than 20 years of fighting."
The exhibition opens on 1 May and runs throughout the summer.
The stories of Torfaen men involved in the battle of Waterloo 200 years ago will be told as part of an exhibition at Pontypool Museum.