Blair Lekstrom said the three-person panel will submit its findings by the end of August, with the report and recommendations to be made public shortly afterwards.
Last fall, mayors and other local politicians from across British Columbia met with Lekstrom, saying they were concerned about unilateral decision-making at BC Transit, which they complained often results in costs increases and service issues.
BC Transit co-ordinates transit service with local governments in more than 50 communities outside of the Vancouver area.
"We are going to look at governance issues," said Lekstrom. "We are going to look at the communication relationship between BC Transit and our local governments."
He said the review will not touch on funding issues, where the province contributes 47 per cent and local governments kick in 53 per cent.
"What we do have is the opportunity to have some better planning," Lekstrom said.
BC Transit operates public transit systems in greater Victoria and other communities outside of Metro Vancouver, which has its own transit service.
The provincial agency carried more than 51 million passengers across B.C. last year.
The three-member panel — Chris Trumpy, Catherine Holt and John King — have been handed terms of reference that include examining the efficiency and effectiveness of BC Transit.
Joe Stanhope, chairman of the Nanaimo Regional District, said the review will improve relations between municipal governments and BC Transit, especially in areas concerning rising costs, funds, communications and governance.
"It's going to help our communities," he said. "BC Transit is not going to be making unilateral decisions without consulting local governments."
For its part, BC Transit says it welcomes the review.