The car will have a stop-go button but no controls, steering wheel or pedals.
Pictures of the Google vehicle show it looks like a city car with a "friendly" face, designed to make it seem non-threatening and help people accept self-driving technology.
Co-founder Sergey Brin revealed the plans at a conference in California.
"We're really excited about this vehicle – it's something that will allow us to really push the capabilities of self driving technology, and understand the limitations," said Chris Urmson, director of the company's self-driving project.
He added that the cars had the ability to "improve people's lives by transforming mobility".
But some researchers working in this field are investigating potential downsides to driverless car technology.
They believe they could make traffic and urban sprawl worse, as people accept longer commutes as they do not have to drive themselves.
Flexible windscreen
The BBC was given access to the Google team to talk about the secret project, and see early renderings of the car.
It looks almost cartoon-like, it has no traditional bonnet at the front, and the wheels are pushed to the corners.
It will seat two people, propulsion will be electric, and at the start it will be limited to 25mph (40km/h) to help ensure safety.
The most significant thing about the design is that it does not have any controls, apart from a stop/go button.
For early testing, extra controls will be fitted so one of Google's test drivers can take over if there is a problem.
The controls will simply plug in, and Mr Urmson believes that over time, as confidence in the technology grows, they will be removed entirely.
The front end of the vehicle is designed to be safer for pedestrians, with a soft foam-like material where a traditional bumper would be, and a more flexible windscreen, which may help reduce injuries.
The vehicle will use a combination of laser and radar sensors along with camera data to drive autonomously.
It will depend on Google's road maps, built specifically for the programme, and tested on the company's current fleet of vehicles.