NuTonomy will install its software, along with sensors and computing platforms, into customised Peugeot 3008 vehicles, with the vehicles expected to hit the streets in September.
A company spun off from MIT, a leading US research university, nuTonomy has been behind a public trial of driverless taxis that got underway in Singapore last year, although engineers rode along to take over in case of a problem.
"We're confident that working with Groupe PSA will bring us closer to our goal of deploying a safe, efficient, fully autonomous mobility-on-demand transportation service for urban driving environments," nuTonomy's chief executive Karl lagnemma said in a statement.
The crossover Peugeot 3008 SUV is a much larger vehicle than the nuTonomy vehicles currently in use in Singapore.
"This collaboration is a significant step towards fully autonomous vehicles, which will enable us to offer different mobility solutions to our customers," said Anne Laliron, head of the automaker's experimental unit.
The companies said they will consider expanding on-road testing to other major cities around the world following the initial phase of this partnership.