Toyota is investing $US50 million ($A71 million) with Stanford University and the Massachusetts Institute of Technology in the hope of gaining an edge in an accelerating race to phase out human drivers.
The financial commitment announced on Friday by the Japanese carmaker will be made over the next five years at joint research centres located in Silicon Valley and another technology hub in Cambridge, Massachusetts.
Toyota has hired robotics expert Gill Pratt to oversee research aimed at developing artificial intelligence and other innovations that will enable future car models to navigate the roads without people doing all the steering and stopping.
Major tech companies such as Google and Uber are competing against a range of carmakers to make robot cars that will be better drivers than people and save lives by causing fewer accidents.
Google, which runs some of the world's most popular online services, has been working on a fleet of self-driving cars for the past six years.
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Its goal is to have the cars capable of driving completely on their own by 2020.
Ride-hailing pioneer Uber has teamed up with Carnegie Mellon University on a Pittsburgh research centre in its quest to build driverless cars.
Toyota has already promised to have collision-prevention technology installed in all its US cars by 2017, but isn't as optimistic about building a car capable of driving entirely by itself within the next decade.
Instead, Toyota envisions cars becoming gradually smarter and more independent of humans as its own engineers and the research centres at Stanford and MIT discover breakthroughs in artificial intelligence and robotics.
The company wants to eventually equip its cars with safety systems that can automatically steer the vehicle toward the middle of the road and issue warnings when a human driver appears to be distracted.
