The effects of using antipsychotic drugs to treat dementia sufferers have been announce by Health Minister Ivan Lewis.
The consultation is designed to produce the first National Dementia Strategy by October, with the review of antipsychotic drug prescriptions to be completed before the strategy is published.
Neil Hunt, chief executive of the Alzheimer's Society, said it was a "landmark day" and described the review as "urgently needed".
The strategy will have three main aims: to ensure early diagnosis and intervention for people with dementia, to improve the quality of their care and to increase awareness of dementia and remove the stigma associated with it.
There are currently an estimated 570,000 people with dementia in England - 700,000 in the whole of the UK - and the government expects that to more than double to 1.4 million in the next 30 years.
The direct costs of dementia to the NHS are currently estimated at around £3.3bn per year and the NHS in England spent £60.9m on dementia drugs alone during 2005.
Mr Lewis said: "Dementia is a condition affecting an increasing number of families in our society and is one of the greatest challenges now facing NHS and social care services.
"That is why this first ever national dementia strategy is so important. It will set out how we will improve the quality of life for people with dementia and their families, improve the quality of care dementia sufferers receive, increase awareness of the condition and ensure earlier diagnosis and intervention.
The consultation will run from June 19 to September 11.