The first of a planned 100 electric vehicles will take to the streets of Milton Keynes in Buckinghamshire, which has helpfully wide pavements, from early 2015 as part of a 65 million pounds five-year project.
The self-driving 'pods' will carry two people plus their baggage and glide along a separate lane from pedestrians at speeds of up to 19 kph.
If successful, they could be introduced in towns and cities across UK.
Sensors will enable the vehicles to avoid obstacles, including people, and are so sophisticated that the pavement division will eventually be removed, 'The Sunday Times' reported.
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From 2017, when the initial trial phase is complete, passengers will be charged around 2 pounds a trip, payable through their mobile phone, to travel on routes across Milton Keynes linking its railway station to its shopping centre and offices a km away.
The exact specifications of the pods have yet to be finalised, but are expected to include GPS and ultrasonic 360 degree sensors that will allow the vehicles to navigate around obstacles.
Coloured grey or green in prototype, the pods will be fitted with a system that allows them to communicate with each other to prevent crashes.