The on-demand video service will include user-generated content
BBC plans to create on-demand video news tailored for regional audiences are to be investigated by Ofcom.
The corporation sees the proposed service, expected to cost Ł68m, as a natural expansion of its local UK websites, which operate in 65 regions.
Regulator Ofcom will assess the impact of such video services on local newspapers and radio stations, as well as affiliated online and TV services.
It plans to report back on its findings in November.
But the new scheme already face strong opposition.
Rival media organisations say the publicly-funded BBC services will damage their own website businesses.
The new proposal replaces earlier BBC plans for an "ultra-local" television service, which were also opposed by local newspapers.
The BBC Trust, which oversees the BBC on behalf of licence fee payers, has launched a public value test and consultation on the plans.
The BBC already has a network of websites offering local content
The BBC hopes the service can boost its existing regional coverage which has come under criticism.
A review for the BBC Trust said the corporation was "falling short of its own high standards" and failing to meet its core purpose of helping inform democracy.
Research found that 37% of people believed that BBC news reports were often not relevant to where they live.
"Last year the Trust challenged BBC management to respond to licence fee payers wanting better local services," said Diane Coyle, BBC Trustee and Chair of the Trust's public value and fair trading committee.
"We wanted a proposal that would deliver public value with minimum adverse impact on local newspapers and other commercial media services.
"We now want to receive all comments - positive and negative - from the public and the industry before we consider the application in detail."
David Newell, director of the Newspaper Society, which represents local newspapers, said: "The BBC should not spend public money duplicating local news services already provided by existing local media companies.
"This was acknowledged by the BBC when it withdrew its plans for ultra-local television last year. Yet today's proposals to strengthen the BBC's local online news services are simply ultra local TV in a different guise."
To offset criticism from local newspapers, the BBC says it will create no more than 10 local video stories a day in each area.
It says the on-demand video material would total around 20 minutes per day, plus an additional three daily news, sport and weather bulletins, each lasting up to 90 seconds.
It also proposes making its own local video content available to other local news websites and television channels - and is offering to buy local video news from other providers on a commercial basis.
Before it makes its decision, the Trust will undertake a public value assessment. This will be complemented by a market impact assessment, conducted by the media regulator Ofcom.
The Trust is scheduled to reach its provisional conclusion on November 18 and make its final decision on February 25 next year.
If approved, the BBC hopes to roll out the service, which will include user-generated content, over the next five years.