Up to 20 Sydney cabs are being fitted with collision avoidance scanners to alert drivers to potential crashes.
In a first for Australian taxis, the Mobileye technology will be trialled in Legion cabs from mid-January to the end of March.
NSW Taxi Council CEO, Roy Wakelin-King, said it was hoped that the technology would significantly improve safety for cab drivers, passengers, other motorists and pedestrians.
He said that after the trial the council would consult the NSW government about any future use of the technology in taxis.
Mobileye is an Advanced Driver Assistance System (ADAS) which constantly scans the road in front of a car and "thinks" seconds ahead of a driver.
It uses the latest in artificial vision technology together with algorithms to monitor the distance to moving and stationary vehicles, bikes, pedestrians, or to determine whether the vehicle is crossing traffic lanes without indicating.
It then alerts the driver to possible danger with a visual and audible warning, giving them extra time to react.