Three buses powered by hydrogen are to be introduced on routes in central London as part of a two-year trial.
The hydrogen-powered buses have zero emissions
The buses, which are the first of their kind in the UK, look like conventional single decker buses but their only emissions will be a trail of steam.
London is one of nine European cities participating in the trial as part of a European scheme to reduce pollution.
It is hoped the trial will find out whether the expensive fuel cell technology can become more efficient.
Route 25 between Oxford Circus and Ilford has been chosen as the first route for the new buses.
Transport for London (TfL) said it would provide a good test because it is a long and busy route which runs from the centre of London and through the East End with a wide variety of traffic conditions.
The fuel cell buses, made by Mercedes, will run alongside conventional double-decker buses on the route.
TfL said this will enable a proper assessment of how the fuel cell system performs day-by-day.
Mike Weston, head of operations for London Buses, told BBC London that they may be introduced London-wide.
"They're proving more reliable than everybody expected for new technology and in some cities they say you see passengers waiting to get on the fuel cell bus as opposed to other vehicles," he said.
London mayor Ken Livingstone, who rode on one of the £800,000 buses, added: "These buses are the greenest, cleanest and quietest ever.
"They will bring the sight of steam back to the capital."
The liquid hydrogen is delivered to a fuelling site where it is dispensed as a gas into pressurised cylinders.
These cylinders are placed on top of the bus with the fuel cell system and coolers.
The only emission is water, which forms into a vapour cloud as it leaves the exhaust.
The bus can run for 125 miles before refuelling.
LONDON'S FUEL CELL BUS
1. Cylinders hold hydrogen sourced from natural gas
2. Fuel cell supply unit - the cells have a gross power of 250kW
3. Fuel cell stacks
4. Fuel cell cooling units
5. Air conditioning unit
6. Water vapour from exhausts are the buses' only emissions
7. Electric motor, can give a top speed of 80kph