The government will designate the southwestern city of Gwangju as the country's first full-scale testing ground for AI-powered autonomous vehicles, as South Korea seeks to catch up in the development technology gap with the United States and China.

According to the transport ministry on Wednesday, the move aims to accelerate development of AI technology for autonomous driving and verification of service commercialization.

The Korea Automobile Testing and Research Institute is expected to select three domestic or overseas companies to participate in the initiative by April through a public bid based on their level of technology, operation capacity and on-site evaluation.

The selected firms will be allocated a total of 200 demonstration vehicles based on their technological level to operate them on the city's roads also covering residential, urban areas, and during nighttime.

Annual assessments will aim to induce a gradual transition to unmanned autonomous driving and the test outcome will lead to service commercialization verification.