The vehicle, a modified BAE Wildcat military jeep, will be programmed with a three-dimensional map of routes around Oxford and nearby Woodstock.
Scientists intend to ask the government to approve the vehicle for use on open roads within the next two months.
The robotic car uses a series of sensors, including cameras and lasers, to calculate its exact location. It can sense the presence of other vehicles on the road and take avoiding action if necessary, something that driverless cars equipped with GPS-based technology have been unable to do.
Professor Paul Newman, head of the mobile robotics group at the university, said the vehicle had made its first driverless journey last week on a private road at the university’s Begbroke science park.
He said: “We want to use it on normal everyday roads where other people would use them. Central Oxford would be nice, also Woodstock because of the variable terrain and roads.”
He added that a research team member would be in the car during testing to take control in the event of an emergency.
The driverless car project is backed by the Engineering and Physical Sciences Research Council, BAE and Nissan. The government has already given £2m in funding for the project.
Google has led driverless car technology in the US, where the state of Nevada has already approved the testing of autonomous vehicles on the state’s roads.
Legally the cars still require two operators to be inside the vehicle during testing. Other road users can identify the cars by their unique red license plates.