Techniques for centralized control of relay operation are described. In an aspect, a designated network entity (e.g., a base station or a network controller) may control the operation of relay stations within its coverage area. The network entity may select certain user equipments (UEs) to be relay UEs that can serve as relay stations for other UEs, e.g., based on pathloss between the UEs and a base station, the locations of the UEs, battery power levels of the UEs, fairness considerations, etc. The network entity may also select a specific relay UE to serve as a relay station for a client UE desiring to communicate with a base station, e.g., based on pilot measurements from relay UEs for the client UE. The network entity may also control transmission of discovery pilots by relay UEs and/or client UEs for relay detection.