A riot squad officer filmed hitting Ian Tomlinson with his baton and pushing him to the ground could be sacked after being accused of gross misconduct.
The officer escaped criminal charges last week after senior prosecutors found conflicting medical evidence undermined a potential case of manslaughter.
Newspaper seller Mr Tomlinson, 47, collapsed in the street and died several minutes after being pushed from behind by the officer and falling heavily.
His family welcomed the decision and their solicitor said there is an "overwhelming argument" for the misconduct proceedings to be held in public.
Metropolitan Police Commissioner Sir Paul Stephenson announced the move at a meeting of the Home Affairs Committee.
He said: "It is right and proper that we do move swiftly with those misconduct proceedings.
"It is also right that there is a full public exposure of the facts at the inquest and this will now be a matter for the coroner.
"That said, I understand none of this diminishes the public anger over the very sad and tragic death of Ian Tomlinson and I understand their disquiet.
"I've made my feelings clear on this matter in the past but I need to be careful not to prejudice any further proceedings, whatever those may be, including misconduct."
Sir Paul added that he fully understands the "sense of anger" expressed by the Tomlinson family and the public over the fact no prosecution has been brought.
"I can sense, I can feel it. I've got real sympathy when a family finds itself in that position," he said.
Senior officers and watchdog officials are considering whether to exercise rarely used powers to hold the disciplinary hearing in public.
The only police misconduct hearing to be held openly followed the fatal stabbing of 24-year-old Colette Lynch in Rugby in February 2005.
Two women Pcs were found guilty of failing to conduct their duties "conscientiously and diligently" when they were called to Miss Lynch's home. They were fined five days' pay.
Tomlinson family solicitor Jules Carey said: "There is an overwhelming argument in this case that the proceedings should be held in public.
"The family will be looking carefully at what the charges are, the timing of proceedings and whether they are open to the public."
Mr Tomlinson's stepson Paul King said prosecutors could reconsider charges at the end of the inquest and the misconduct hearing must not prejudge its outcome.
He said: "If the officer faces disciplinary charges now, does that mean he could get away with not facing charges for the death of our dad if there is an unlawful killing verdict at the inquest?
"I can see how it would look nice for the police if the officer turned up to the inquest in his civilian clothes."
Director of Public Prosecutions Keir Starmer sparked fury and protests outside New Scotland Yard when he announced Mr Harwood would not be prosecuted.
He said there was "no realistic prospect" of a conviction after a 15-month inquiry because of "irreconcilable" differences between medical experts.
Mr Tomlinson's family accused the authorities of a cover-up and instructed their legal team to review the decision ahead of an inquest into his death.
Members of the Home Affairs Committee have asked Attorney General Dominic Grieve to review the decision.
Green Party MP Caroline Lucas proposed an early day motion in Parliament expressing her disquiet with how the death and inquiry was handled.
She called on City of London coroner Professor Paul Matthews to step aside because of his decision to appoint Freddy Patel to conduct the post-mortem examination.
The MP said Home Secretary Theresa May should appoint a judge to oversee a "prompt and effective" inquest into the "far-ranging issues" raised by the case.
Dr Patel has been suspended from the Home Office register and faces being struck off by the General Medical Council over claims he botched four other post-mortems.
Policing minister Nick Herbert said he is "deeply unhappy" about the incident and said the Government will watch misconduct proceedings and the inquest closely.
Len Jackson, of the Independent Police Complaints Commission, said: "We are pleased the Metropolitan Police has responded quickly to the file of evidence we provided them with on Friday.
"We welcome their proposal and await receipt of a formal letter from the Met which will set out the full detail.
"We will examine the proposed course of action before agreeing how this should proceed and respond as swiftly as possible."