Dyke, who was appointed to chair a local TV committee in October, made the comments in reaction to a major local TV report published yesterday.
The report, compiled by an advisory panel led by Lazard investment banker Nicholas Shott, said that around 10 to 12 local TV services would be viable to operate in UK conurbations, broadcasting around two hours of "reasonably low cost but high quality content" every day.
Shott's panel also said that there is a "coherent argument" that local TV would initially be developed for digital terrestrial television (DTT), but the long-term aim would be to "pave the way" for its transition to IPTV, particularly the forthcoming BBC-led joint venture YouView.
Culture secretary Jeremy Hunt wants to create a network of as many as 80 local TV services in the UK, with the first stations due to be awarded licences next summer.
In a statement, Dyke welcomed the proposals put forward in the Shott report and stressed that 2011 is the time to "stop just talking about local TV and start making it happen".
"Nicholas Shott has called for reserved spectrum [on DTT] and priority on the programme guide to be used to support local TV services and we believe this is the right way forward," said Dyke.
"We will be responding to some of the questions raised by the Shott report in the new year including the number and diversity of stations to be offered, the regulatory framework in which they will operate and the options to develop a network centre.
"Most of all we want to ensure that models are developed to enable local TV to provide a real boost to local economies and local democracy across the UK. There's still a lot of detail to be worked through but the time is coming in 2011 to stop just talking about local TV and start making it happen."
Peter Williams, spokesman for trade organisation United for Local Television (ULTV), added: "Nicholas Shott has done an enormous amount of work in a short space of time. We believe citizens have a democratic right to see their local representatives on the TV and hold them to account through news and discussion programming.
"The big question is how it will work and Nicholas Shott has shown there are a number of options for the government to review. The Network Committee, chaired by Greg Dyke, is working hard assessing options for the development of a local TV network and intends to put forward proposals to input into the government’s consultation process in the new year."
Last month, Dyke said that the creation of a new regional TV channel for Scotland would be "of value" to the country as an alternative to BBC Scotland and STV.