The state’s department of motor vehicles (DMV) gave manufacturers a green light on Monday, approving plans to deploy autonomous vehicles without a “natural person” inside the car.
The news represents a huge coup for Silicon Valley tech experts, who had taken to testing driverless vehicles outside of California due to strict local legislation.
Now 50 companies have been given a licence to test self-driving vehicles, signalling a step towards the wider deployment of autonomous vehicles.
A spokesman for the California DMV said: “This is a major step forward for autonomous technology in California.
“Safety is our top concern and we are ready to begin working with manufacturers that are prepared to test fully driverless vehicles.”
As well as California and Arizona, Nevada and Michigan have also allowed fully driverless vehicles, while a number of other states have run localised pilot programmes.
British chancellor Philip Hammond has said driverless cars will “become a reality” in the UK by 2021.
The Government estimates the industry will be worth £28bn to the UK economy by 2035 and will support 27,000 jobs.