A set top box produced by YouView, previously referred to as Project Canvas, is currently being trialled in 350 homes in the UK.
The launch of YouView was originally set for 2010, but the project was delayed several times, first by regulatory challenges but latterly by technical problems.
There have been concerns that the YouView offering could be out of date when it finally launches due to the increased choice on the market from rivals, such as Sky and Virgin Media.
But YouView's backers - the BBC, ITV, Channel 4, Channel 5, TalkTalk, BT and transmission firm Arqiva - will hope that the service can still strike a chord with consumers, particularly those who don't want a pay-TV service.
Few firm details are known about the YouView product at this stage, but it is expected that the boxes will give access to all the standard and high definition channels available on Freeview, along with video on-demand applications, such as BBC iPlayer and 4oD.
It is also likely that the box will support various web services, such as YouTube, Facebook and LoveFilm, along with feature various 'smart' functionality, such as a personal video recorder (PVR), backwards scrolling EPG and 'Remote Record'.
Lord Sugar, who joined the project as executive chairman in March 2011, is thought to have been down to the renewed push for the service towards going into commercial launch. But he also delayed a rollout at the start of May due to technical difficulties.
In a short statement today, YouView confirmed that it was "firmly in launch phase with boxes working in 350 homes".
"We are confident that this trial will give us the substantive feedback we need to allow us to extend to thousands of homes in the coming weeks with a launch to follow in due course," the project added.
It is thought if the small trial proves successful, it will be expanded into a much larger testing phase within a month.
YouView set top boxes are expected to cost around £200 when they launch, although internet service providers BT and TalkTalk are likely to subsidise their boxes as part of customer product bundles.
Separately, TalkTalk is already running its own closed trial of YouView among its employees, which will soon expand to customers of the service provider.
Alongside its financial results released earlier in the month, TalkTalk said that YouView is "on-track" for launch in the third quarter of 2012.
"YouView will bring to our customers all of the 'plug-in-and-watch' simplicity of Freeview, plus the UK's leading internet catch-up and video on-demand services, all instantly available through one simple, intuitive set-top box and proprietary electronic programme guide," said the firm.
"Development within the YouView team is progressing well and within TalkTalk we are making good progress on provisioning capability, as well as operational and CRM readiness to support our TV service within our existing operational structures.
"We began 'friends and family' trials focusing on the end-to-end customer experience in April and will be extending the trial to our customers soon."