Culture secretary Jeremy Hunt wants to develop a network of as many as 80 local TV stations to replicate the type of vibrant services already operated in the US, France and other countries.
United for Local Television (ULTV), the trade body representing local TV operators, has formed a committee of industry executives to review the best practice for local TV services.
Chaired by Dyke, the committee will examine a variety of solutions, including how local TV stations could share resources and programming.
Joining Dyke on the five-strong panel will be former BBC director of nations and regions Pat Loughrey, former commercial director at the ITV Network Centre Mike Southgate, former ITV controller of factual programmes Peter Williams, former Living TV director Lis Howell and Daniel Cass, the chief executive of local TV group SIX TV.
Williams, the committee's spokesperson, said that the panel will attempt to "help everyone to understand what different local TV services might look like in the future".
He said that the committee will work with the existing local TV reviews, including Nicholas Shott's consultation, and aim to submit an initial report to Hunt in "the coming weeks".
"We believe it is the right time to move away from the debate about whether local TV is a good idea and to flesh out the detail of how new services will actually work in practice," said Williams.
"Our committee intends to explore all the options for local groups to deliver cross-platform TV services including reviewing how a network centre might evolve. We intend to provide a preliminary report to the culture secretary Jeremy Hunt with our initial thoughts in the coming weeks."
He added: "We wish to explore the options for partnership and collaboration across media and to help government, investors and the wider industry understand the new environment and the opportunity it presents.
"We will look at radical options to deliver new TV services able to make an important contribution to the democratic process and the development of a new tier of public service broadcasting."
Last month, Hunt confirmed that the government wants to enact legislation giving priority to local TV channels on the digital terrestrial electronic programming guide (EPG).
His comments followed Shott's interim report, which indicated that a "channel number" in a prominent position on the EPG would be "highly desirable" for local TV operators.
The approach, which has long been called for by ULTV, would possibly involve a local TV channel being allocated on Freeview, or the Red Button interactive service being used to deliver local content.
In its new licence fee settlement, the BBC has agreed to provide £25m in 2013/14 and up to £5m per annum from 2014/15 to fund local media initiatives. ULTV said that it has already held a preliminary meeting with the BBC about how this funding might be used.