The four cities chosen for driverless car tests include Greenwich, Milton Keynes and Coventry as one project, and Bristol.
Jaguar Land Rover and Ford are among the partners for the Coventry and Milton Keynes "AutoDrive" programme, which will involve trialling battery-powered, self-driving pods on pavements. It will eventually allow passengers to hail the pods like a taxi, paying £2 a trip through a mobile app.
Jaguar Land Rover is involved in two key aspects of the £19.2m, three-year project. The company will develop the human-machine interface for the driverless pods.
It will also test new technologies that enable its own vehicles to be temporarily autonomous on the streets of Milton Keynes.
The idea, according to the company, is not full autonomy, but a vehicle that drives itself "for part of the time".
Understanding driverless cars
Dr Wolfgang Epple, Jaguar Land Drover's director of research and technology, said the key to driverless vehicles was determining the comfort level of the driver.
He said: "To successfully introduce driverless cars, we actually need to focus on the driver, as well as pedestrians and other road users.
"So we are researching the human-machine Interface in cars and self-driving pods to ensure all road users understand, accept and support these new and exciting technologies.
"Our vision is to offer a seamless choice of an engaged or autonomous drive."
There are around 17 partners on the AutoDrive project, including Tata and engineering firm Arup.
Greenwich will run the "Gateway" project, which will involve testing electric shuttles and tele-operated driving.
The Transport Research Laboratory will lead the tests and investigate how drivers behave through a driving simulator, which will involve mapping the Greenwich peninsula in 3D.
Bristol's Venturer consortium will examine the legal and societal impacts of driverless vehicles. The consortium consists of local authorities, insurance firm AXA, local universities.
The four cities were chosen after a competition by quango Innovate UK, which will dish out total funding of up to £19m.
The businesses involved in each project will also add their own funding, and tests will last between 18- to 36-months from 1 January.