The City Alert Texting System (Cats) will warn people where attacks are taking place and pass on information about what to do to people caught in an incident.
Londoners sign up to the commercial service using the postcode of the areas in which they live and work.
Once the system is working in London, it will be rolled out to other cities across the UK.
Watching London
The Cats service will pass on emergency news alerts to subscribers about life-threatening events taking place in London.
"We were horrified by what happened in New York on 11 September which demonstrated the vulnerability of major urban areas in open societies," said Cats founder David Pieterse.
The Cats service will alert all the people affected by a disaster or attack and then give them advice about how to cope with its aftermath.
Notification of an attack or incident will be followed by a plan of action message that lets people know what they should do next.
The information could tell people to evacuate an area, avoid particular locations or even give those directly affected directions to hospitals or aid stations.
Mr Pieterse said the 1995 Sarin gas attack on the Tokyo subway left 5,000 people searching for the location of their nearest hospital.
The service has already been demonstrated to the London Fire and Emergency Planning Authority.
Signing up to the service costs £1.50 for each postcode that people register. For most networks the cost will be reverse-billed to their phone account. However, Virgin customers will have to pay by cheque.