A hundred self-driving Volvo cars will be on public roads in and around the city of Gothenburg, Sweden, in 2017.
The "Drive Me" programme has a budget of 500 million kronor and is a joint venture between the Volvo and the Swedish Transport Administration and the city of Gothenburg.
The first driver-less cars will have a maximum speed of 70km per hour on about 50km of selected roads including commuter routes with heavy traffic. The project will begin in 2014.
Self-driving cars receive data through a 360-degree camera system, GPS and other sensors which enable them to navigate safely and avoid collisions.
"Non-drivers" taking part in the project will receive training to properly use the cars, which are expected to respond to everyday traffic situations and to park themselves.
"We aren't the world's biggest country, we aren't the world's largest car maker, but we make up for that by being smarter and working together in a simpler way," said Volvo Cars chief executive Haakan Samuelsson in Stockholm on Monday.
Nissan of Japan has announced plans to have its first models ready by 2020.
