After several years of testing everyday cars modified to drive themselves with the help of sensors, navigation equipment and computers, Google will now build its own car from scratch.
Mr Urmson said the development of driverless cars was "an important step toward improving road safety and transforming mobility for millions of people".
Advocates claim the cars have the potential to eliminate crashes by removing the chance of driver error.
The car will use laser and radar sensors along with camera data to navigate streets without a driver and allow it to "see" several hundred metres. A flexible windscreen will be used to help reduce injuries.
The main beneficiaries of the new Google car will be the blind, the infirm, and those out for a night's drinking or even those who do not have a driving licence.
Mr Urmson predicted the vehicles would be on the road within a year.
Look, no hands!
The Google car will:
• Have a stop-go button but no controls, steering wheel or pedals.
• Have a top speed of 40 km/h.
• Use laser and radar sensors with camera data to navigate.
• Be in use by the end of the year, according to the company.