In perturbative gravity, it is straight-forward to characterize the two local degrees of freedom of the gravitational field in terms of a mode expansion of the linearized perturbation. In the non-perturbative regime, we are in a more difficult position. It is not at all obvious how to construct Dirac observables that can separate the gauge orbits. Standard procedures rely on asymptotic boundary conditions or formal Taylor expansions of relational observables. In this paper, we lay out a new non-perturbative lattice approach to tackle the problem in terms of Ashtekar's self-dual formulation. Starting from a simplicial decomposition of space, we introduce a local kinematical phase space at the lattice sites. At each lattice site, we introduce a set of constraints that replace the generators of the hypersurface deformation algebra in the continuum. We show that the discretized constraints close under the Poisson bracket. The resulting reduced phase space describes two complex physical degrees of freedom representing the two radiative modes at the discretized level. The paper concludes with a discussion of the key open problems ahead and the implications for quantum gravity.