Driverless cars could be on UK roads within four years under government plans to invest in the sector.
Chancellor Philip Hammond told the BBC the objective was to have "fully driverless cars" without a safety attendant on board in use by 2021.
"Some would say that's a bold move, but we have to embrace these technologies if we want the UK to lead the next industrial revolution," he said.
However, the chancellor admitted he had yet to use a driverless car himself.
"I'm promised to go in one when we visit the West Midlands tomorrow," he told the BBC's Andrew Marr show.
Mr Hammond is due to announce regulation changes in Wednesday's Budget which will allow developers to apply to test driverless vehicles on UK roads.
Asked about the potential loss of jobs for drivers, he said the country could not "hide from change" and the government had to equip people with the skills "to take up new careers".
The chancellor is also expected to detail proposals to build 300,000 new homes in the UK a year, as well as extra money for NHS nurses' pay.
Mr Hammond's announcement comes after the UK's biggest car manufacturer, Jaguar Land Rover, began testing driverless cars on public roads.
The trials, which rely on sensors that allow the cars to detect traffic, pedestrians and signals, took place in Coventry city centre over several weeks.
Jaguar said a human was on board to react to emergencies.
The government said the industry would be worth £28bn to the UK economy by 2035 and will support 27,000 jobs.
Labour quipped that under the Tories it would not only be the cars with no-one in the driving seat.
'Long way off'
Critics have warned the technology necessary for driverless cars to succeed is a long way from being ready.
Former Top Gear host and now Grand Tour presenter Jeremy Clarkson said he was recently in a self-driving car which made two mistakes which could have killed him in just 50miles.
Writing in the Sunday Times magazine, Mr Clarkson said the incidents convinced him the technology was still "a very long way off", adding: "For now, we're miles away from it."
In the Budget, Mr Hammond is also expected to announce:
- £75m for artificial intelligence
- £400m for electric car charge points
- £100m to boost clean car purchases
- £160m for next-generation 5G mobile networks across the UK
- £100m for an additional 8,000 fully-qualified computer science teachers supported by a new National Centre for Computing
- A retraining partnership between the TUC (Trade Union Congress), CBI (Confederation of British Industry) and the government
- £76m to boost digital and construction skills
Funding for 5G technology will go towards the National Cyber Security Centre to ensure the security of the mobile network, as well as testing on roads to help provide the network needed for driverless cars.
A further £35m will be used to give rail passengers reliable mobile connections and "lightning-speed" internet during journeys. Trials are due to begin on the Trans-Pennine route, which connects Leeds, Manchester and Liverpool.
Labour shadow chancellor John McDonnell said the Budget needed to show a "genuine, decisive change of course" and not "empty promises".