Driverless cars can be legally tested on public roads in the UK, according to the latest regulatory review.
The review Driverless cars in the UK: a regulatory review was published by the Department for Transport to identify issues that needed to be addressed to enable automated vehicle testing.
The review considered the best and safest methods to trial automated cars, such as the ability to enable users to take control of the cars if necessary.
In addition, the government announced a competition to conduct driverless car tests with the help of £19m state funding.
Transport minister Claire Perry said: "Driverless cars are the future. I want Britain to be at the forefront of this exciting new development, to embrace a technology that could transform our roads and open up a brand new route for global investment.
"These are still early days but today is an important step. The trials present a fantastic opportunity for this country to take a lead internationally in the development of this new technology."
Business secretary Vince Cable also welcomed the news, saying innovation in automotive technology would promote jobs in the UK and could lead to a £900bn industry.
He said: "The UK is at the cutting edge of automotive technology - from the all-electric cars built in Sunderland, to the Formula 1 expertise in the Midlands. It's important for jobs, growth and society that we keep at the forefront of innovation. That's why I launched a competition to research and develop driverless cars. The projects we are now funding in Greenwich, Bristol, Milton Keynes and Coventry will help to ensure we are world leaders in this field and able to benefit from what is expected to be a £900 billion industry by 2025."
A code of practice will be published in spring 2015 to provide clarity to those who invest in further research and development with a "light-touch non-regulatory approach".
A recent poll found half of UK adults would be reluctant to sit as passenger in a driverless car.