Self-driving cars could be allowed on UK motorways by the end of this year.
The Department for Transport says it will allow hands-free driving in vehicles with lane-keeping technology on motorways with slow traffic, at speeds of up to 37mph.
The technology monitors speed and keeps the car at a safe distance from other cars, normally through the use of cameras and sensors.
If a collision risk is detected the vehicle can brake or change direction.
This means the driver does not have to control the vehicle but must be available to do this if needed.
The DfT said human error contributes to over 85% of accidents, so the technology could make roads safer.
Transport minister Rachel Maclean said: "This is a major step for the safe use of self-driving vehicles in the UK, making future journeys greener, easier and more reliable while also helping the nation to build back better.
"But we must ensure that this exciting new tech is deployed safely, which is why we are consulting on what the rules to enable this should look like.
"In doing so, we can improve transport for all, securing the UK's place as a global science superpower."
Jim Holder, editorial director of magazine and website What Car?, said the new policy is a "sensible first step" towards autonomous driving.
"These are very, very controlled circumstances, low speed, relatively straight roads, clear road markings."
Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, said: "These advances will unleash Britain's potential to be a world leader in the development and use of these technologies, creating essential jobs while ensuring our roads remain among the safest on the planet."
Others were more cautious, however.
Steve Gooding, director of the RAC Foundation, said: "There is a risk of situations in which drivers over-rely on the automated system, expecting it to deal with events for which it is neither intended nor capable.
"And what happens when drivers are expected to take back control in an emergency? Research for us shows that it can take drivers several seconds to regain command of their vehicle."
AA president Edmund King said: "We shouldn't be in a race to take drivers' hands off the wheel.
"There are still gaps in how this technology detects and stops if the vehicle is involved in a collision.
"There are still question marks over how drivers will be fully informed how these systems work.
"More needs to be done to rigorously test these systems before they are used on UK roads."
A consultation has been launched on updates to the Highway Code to ensure autonomous systems are used safely and responsibly.