Three major research projects aimed at improving congestion and journey times have been awarded more than £8m.
The three projects, which will see companies working with academic institutions and network operators, have been awarded the funding through the Government's Future Intelligent Transport Systems initiative.
"Congestion and pollution are problems that both affect the economy and are frustrating for road users.
"With the number of vehicles on the UK's roads set to rise, along with levels of congestion, we need to find solutions - and new technology will play a key role,” said science and innovation minister Ian Pearson.
“We are confident that these projects will help to provide innovative solutions for this major challenge."
The first of the three projects is Freeflow, which will provide drivers will meaningful traffic information.
Rather than simply being told there is a queue ahead, drivers will be told how to avoid it.
The project, which will be trialled in York and London, will develop the system using military "situation awareness" technology.
The second project - Foot-Lite - is designed to encourage safer and more environmentally-friendly driving styles through the development of driver/vehicle interface systems.
The project aims to give drivers information - for example via an in-vehicle display system - that will help them to drive in a way that is safer, cuts congestion and reduces emissions.
Finally, the user innovation project will investigate how transport users are already using existing forms of information communication technology (ICT) to enhance transport systems - such as workers using email to organise and manage car-sharing clubs.
It then hopes to identify and develop new ways for existing technologies to help address transport challenges.
"We know we cannot simply build our way out of congestion,” said minister for transport Rosie Winterton.
“These three projects will help us to continue to provide a transport system that balances the needs of the economy, the environment and society.”