CCGs will lead a push to diagnose and support two thirds of people living with the condition. At present, just 45% of people in England with dementia have a formal diagnosis.
Health secretary Jeremy Hunt said: 'For too long diagnosis rates have been shockingly low, leaving too many people living in the dark trying to cope with this terrible condition undiagnosed, unable to get the help they need and deserve.
'Dementia is a serious and growing problem so this ambitious drive to see a clear majority of people identified and supported is a major step forward.'
He added: 'I am pleased that NHS England has set a clear direction and sent a message to the NHS that we must do more. I fully support every GP, doctor and health worker who accepts this challenge.'
Diagnosis rates have risen in recent years, up from 42% in 2011/12, but there is a postcode lottery in identification with rates in some areas as low as 32%.
NHS England will provide CCGs with advice on improving diagnosis rates and setting up additional memory clinics where needed.
The push forms part of the prime minister's 'Challenge on Dementia', which aims to increase awareness of the condition, provide better support for patients, and boost research efforts.