The New York Times start-up, The Local, will feature posts by New York Times journalists and community members about everyday life in the neighbourhoods of Clinton Hill and Fort Greene in the borough of Brooklyn, and Maplewood, Millburn and South Orange in New Jersey.
In February, Google executive Tim Armstrong launched a similar 'hyper-local' news service in the same, small New Jersey suburbs.
Armstrong, who runs Google's advertising operations, is backing a community news start-up called Patch, which also launched in the New Jersey suburbs of Maplewood, Millburn and South Orange, with plans to eventually spread throughout the rest of the US.
Bloggers have claimed that NY Times' The Local looks to be a direct competitor for Patch -- and Google -- in the revenue battle for small community advertisers.
However, analysts also say the hyper-local model, which employs one reporter per community, will provide opportunities for new graduates to gain experience in the industry and will be able to provide better coverage for local issues than the larger daily titles.
For the Brooklyn sites, The Times is blending its project with one being undertaken by the City University of New York Graduate School of Journalism.
The school will collaborate with The Local in Clinton Hill and Fort Greene to teach residents about reporting and the use of interactive media. CUNY journalism students will contribute to The Local and help area residents contribute, and will also have chances to complete summer internships.
Jim Schachter, editor for digital initiatives at NYT, said: "We'll be reporting on the big concerns for these communities, from deer hunts to property taxes, crime to school budgets.
"And we'll be striving to empower residents to report on their own communities, as well as to contribute their creativity and ideas."
Patch will also use community members for some news sources but also employs about 20 reporters and editors at its headquarters in New York.
Last week, The Huffington Post founder Arianna Huffington also made headway towards the launch of a number of hyper-local news sites with the purchase of social networking Outside.in, as she plans to create local editions of The Huffington Post.