The idea, proposed by pay TV broadcaster Foxtel, involves 16 teams drawn from all state and territory leagues with greater representation from the strong VFL, WAFL and SANFL competitions.
Games would be played as curtain raisers before AFL games and would be screened on Foxtel.
Public interest in the state leagues has increased after the success of mature-age VFL recruits Michael Barlow, James Podsiadly and Alex Silvagni.
Several more state league players, including Hawthorn's Isaac Smith and Fremantle pair Tendai Mzungu and Peter Faulks, found homes at AFL clubs in the recent NAB AFL Draft and during trade week.
Demetriou said Foxtel's proposal was supported by the AFL and the state leagues as a way to further enhance the standard of the second-tier competitions around the country.
"It's going to be such a competitive AFL competition that you do need strong second-tier competitions," Demetriou said. "These feeder teams that are [linked] into these AFL teams need to be producing and developing AFL players of the future.
"Anything that will enhance the second level of competition is very important for our AFL competition.
"We've spoken to all the other leagues and they were very, very supportive. Anything we can do to enhance their league and enhance their profile, they're supportive."
With the introduction in 2011 of the new North East league that effectively combines the existing ACT, Queensland and Northern Territory competitions, Demetriou said the time was right to consider the Champions League format as well.
"The timing seems to be absolutely on the money. Whether it can get up for next year is something that we're working through at the moment," he said.
"We'll work through it very quickly in the next couple of weeks."
