Train passengers should be able to use their Oyster cards on most of the London rail network by the end of 2009.
The electronic travel smartcard can be used on London Overground, the London underground, buses, trams and Docklands Light Railway.
But many suburban rail firms do not accept the pay-as-you-go card.
London Mayor Boris Johnson said an agreement with most train companies is near, except with South West Trains which operates out of Waterloo.
Commuters in London have been using prepaid Oyster cards for several years.
"I do think it is absolutely crackers - why are we still buying paper tickets?"
They were introduced by Ken Livingstone, Mr Johnson's predecessor.
Transport for London (TfL) charges those who use the cards less than it charges whose who pay for individual journeys in cash.
As a result of the change it will mean that those coming in from the suburbs will be able to use one card to get around the capital.
TfL has been in negotiations with the Association of Train Operating Companies to let Oyster cards be used on all services.
The 10 train operators initially resisted because of the costs involved but TfL is now installing Oyster machines at all stations in zones one to six at a cost of £40m.
Mr Johnson said: "The negotiations are very close to completion.
"I do think it is absolutely crackers - why are we still buying paper tickets?
"We are driving forward the oysterisation of the whole system and I think it will add greatly to the convenience to travellers in this city."
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