It is expected the first elements of the Smart Mobility Project will be in place by April next year.
The initiative, which is backed by the Scottish Cities Alliance (SCA) with funding from the European Regional Development Fund, plans to build on Dundee's position in smart travel, active travel and low carbon vehicles.
It is one of four cities selected for the scheme, alongside Aberdeen, Inverness and Stirling.
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Overall, Dundee will become part of a joint programme to deliver social/economic priorities includin reduced cost, congestion and carbon emissions as well as improving air quality.
Capital investment will be made in software and technology to enhance vehicle sharing, which will broaden the public transport infrastructure and be used to create a smart mobility hub to act as a physical demonstration of the scheme.
Will Dawson convener of the city development committee said: "Dundee is widely recognised as being at the forefront of clean, efficient and integrated transport solutions, from electric cars and charging points to hybrid buses and smart ticketing.
"As technology develops and emerges at a rapid pace in the transport sector this scheme proposes to bring some of those innovations together in a co-ordinated and controlled way that will demonstrate to interested public, Third Sector and private bodies how they could work in a real-life environment."
(LM)
