TVB plans to form a joint venture with the state-owned Shanghai Media Group to help it expand into the mainland market.
SMG's former boss Li Ruigang is expected to run the venture out of Shanghai.
Li (pictured) headed the SMG from 2002 until August last year, when he was asked to join the Shanghai city government.
He raised eyebrows recently when he resigned as deputy secretary general of the Communist Party's Shanghai Municipal Committee.
Li's only job title now is as the chairman of Shanghai-based China Media Capital (CMC), a semi-official investment fund backed by SMG and China Development Bank.
Li helped launch CMC in 2009 during his tenure at SMG, the mainland's second-largest media company by revenue after the state broadcaster, China Central Television.
CMC will also be involved in the planned joint venture with TVB and SMG, according to people with knowledge of the matter.
Shanghai government officials said on Tuesday that Li had in recent months been expected to take a senior job at TVB and it was understood that he would take a position in Hong Kong.
It now appears he will first play a senior role in the joint venture and will be based in Shanghai.
Li's departure from the city government, which rarely happens at such senior level, is understood to be intended to allow him to return to the media business.
A TVB spokeswoman last night confirmed the company's joint-venture plan with SMG and CMC.
The company's shares yesterday shot up 4.4 per cent to close at HK$49.45 in heavy trading.
Li, a member of the Communist Party, may find it difficult to join TVB directly any time soon, given Hong Kong's regulatory restrictions governing the media, which require clearance from the Hong Kong Broadcasting Authority for non- permanent residents to take senior positions.
'Given Li's Communist Party membership, it's difficult for him to come to Hong Kong to work and take a direct role in TVB,' said a person familiar with the matter but who declined to be identified because of its sensitive nature.
By running the joint venture, rather than taking a senior post at TVB, Li would avoid conflict with the Broadcasting Authority. Its permission is not required for a mainland-based media joint venture involving Hong Kong companies.
At CMC, Li recently impressed the industry by setting up a joint venture with US filmmaker DreamWorks Animation to produce Chinese films using US technology.
The plan for Shanghai-based Oriental DreamWorks was announced during Vice-President Xi Jinping's visit to the US. TVB is not involved in this venture.
Li had previously won plaudits for transforming SMG into a national media giant from being a city- focused broadcaster after he took office in 2002.
SMG and CMC were among the rumoured bidders for TVB in 2010.