BGT judge Alesha Dixon, Diversity dancer Jordan Banjo and Strictly Come Dancing pro Oti Mabuse are also said to be working on the project.
And they're joined by Broadway performer and Glee star Matthew Morrison.
The show is being tipped for Saturday nights on BBC One and currently has a working title of 'The Greatest Dancer', reports The Sun.
Cheryl's role is said to be as a mentor, while Alesha and Jordan act as hosts.
Oti and Matthew make up the 'coaching panel on the potential series, which is made by Simon Cowell's Syco company.
"Cheryl’s always been associated with ITV. She was made a star by Popstars: The Rivals," a source said today. “Moving to the BBC is a huge deal for her.
"It’s a trial run at this point. But everyone is hoping it’ll get the green light."
A pilot was filmed in front of a live audience this week.
A potential prize is apparently a spot performing on the Strictly Come Dancing final.
The source added: “Alesha and Jordan had great chemistry during the run-through. And Matthew and Oti are trained dancers so are perfect choices alongside Cheryl as ‘dance captains’ or mentors.”
The news follows reports that Cheryl is set to start 'final talks' to return to The X Factor.
The former judge - who appeared on the show between 2008 and 2010 and then again in 2014 and 2015 - is rumoured for another comeback.
Speculation that Cheryl could be returning has been ongoing for months already, even if The X Factor won't return to TV until the autumn.
But The Sun says that X Factor boss Simon Cowell is due to meet with ITV this month to formalise plans.
The X Factor will air on ITV later this year.