Audi has received necessary regulatory approvals to test its self-driving fleet in California. The new law was signed Tuesday to allow testing of autonomous vehicles on public roads in California, the California Department of Motor Vehicles said in a press release.

The manufacturers are required to get a special testing permit and comply with several safety and insurance requirements.

"Autonomous vehicles are the future of transportation. The potential safety and mobility benefits are enormous," Jean Shiomoto, director of the Department of Motor Vehicles, said in a press statement. "Testing on public roads is one step to developing this technology, and the DMV is excited in facilitating the advancement of autonomous vehicles in California."

California isn't the first state to approve the testing of autonomous fleets. Other states, including Michigan, Florida and Nevada, have also allowed self-driven cars on the roads for testing. Nissan, Mercedes-Benz, Toyota, Ford, GM and the Google have long been testing their versions of self-driving cars.

Google has clearly led the way with its advanced cars that have covered more than 700,000 miles of auto-piloted navigations in complex situations.

Based on a study by IHS Automotive, nearly 230,000 new autonomous cars will hit roads each year by 2025, adding to the sustainable base of 11.8 million on-road cars in a decade, Los Angeles Times reports.

"Audi is a driving force behind the research taking automated driving from science fiction to pre-production readiness," Scott Keogh, President, Audi of America, said in a press release, Tuesday. "Obtaining the first permit issued by the State of California shows that we intend to remain the leader in this vital technology frontier."

Self-driving cars being tested on California roads must ensure registration with the DMV and undergo vigorous testing under controlled conditions. Car makers must also have a driver placed behind the wheel at all times during the test to take immediate control in emergency situations. Accidents involving the test cars must be reported to DMV and car makers must maintain a $5 million insurance bond.