The group, who are part of Levine's Hubris Records, are scheduled to play a significant role in the forthcoming story lines of the teen soap and are expected to make a big splash in the series on New Year's Eve when Levine plans to capitalise with their album.
The producer, who is also chairman of the Music Producers Guild, said the hook-up with the TV programme followed an approach from Hollyoaks executive producer Tony Wood, who wanted to bring a real - as opposed to a fictional - band into the show.
Levine pitched Daytona Lights, who have already carved out a decent live following in London, noting there was a real problem currently getting bands media exposure. "There are two worlds out there, the X Factor and the indie world, which is being completely ignored by TV and many radio stations and they don't have any way of having their music played on the mainstream. So, if you're an indie band there is no chance of getting your music out because there is no Old Grey Whistle Test or The Tube anymore."
Audio Network's director of publishing Simon Anderson was also brought in to thrash out a licensing deal between the partners. Anderson said there were four ingredients to the mix. "There's a great band, great production and recording, simple licensing and global copyright and a good TV shop window," he said. "That's what you need and it can be repeated again."
The deal means the band members of Daytona Lights will begin to appear as themselves in Hollyoaks from next month. They will be introduced to the audience gradually, rather than transported in as a fully-fledged band.
"From day one you will see the band members individually. The concept is as you would have in real life where you come across a real band , so people are in the students union drinking coffee while the band is sound-checking and running through their songs," explained Levine, who disputed the move was similar to The Monkees. "This is very different because that was a TV series about the band. This is almost akin to The Beatles in A Hard Day's Night, which is a film which happens to have The Beatles in it."
However, when Daytona form in the show and begin to play songs, the tracks will be made available to download from the band's website and iTunes. Some exclusive - possibly acoustic - tracks might also be issued as free downloads.
The band's track White Horses will be the first recording to be released next month with another six or so tracks available before Christmas ahead of their album post-Christmas.
Levine added the choice of tracks, when they would be made available and other activity was still up in the air. "We don't have to say that is the one that goes to radio," he said. "How many times have I heard record companies select a track, take it to radio and then when radio doesn't play it, the band is dropped? We don't have to do that. We can do what we like. We don't have to play by any rules at all."