Described as "UK's most ambitious autonomous driving trial," the Drive Me scheme will kick off with a limited number of semi-automatic cars taking to the streets of the capital early next year.
The plan will then be extended in 2018 to up to 100 vehicles.
The Swedish company says the introduction of automatic driving cars will "revolutionise Britain's roads in four main areas — safety, congestion, pollution and time saving," as up to 90% of all road accidents are caused by driver error or distraction.
Similar tests are due to take place in Gothenburg and across China.
“Autonomous driving represents a leap forward in car safety,” Håkan Samuelsson, chief executive of Volvo, said in a statement.
Volvo has not explained which parts of London will be used for the trial, but participants will have to sit behind the wheel because of the laws around autonomous vehicles.
British towns such as Milton Keynes and Bristol already have testing areas for driverless cars but this would be the first time autonomous vehicles will take to the streets.
Adapted Volvo's XC90 vehicles will be used in the trial.
The Chancellor George Osborne has promised to introduce legislation that will allow autonomous vehicles on British motorways by 2020.
Business Secretary Sajid Javid said: "Driverless cars will see our journeys become faster, cleaner and safer.
"The UK is leading the way in developing the technology needed to make this a reality thanks to our world-class research base and these types of trials will become increasingly common."
Original Source: http://mashable.com/2016/04/27/volvo-driverless-cars-london/#B25j59nPngqY