The Post Office has signed a five year contract with the DVLA, allowing motorists to renew photocard driving licences using cutting edge technology.
From next spring, up to 750 branches will have a dedicated counter for licence renewal, allowing paperwork to be scanned into a computer and a driver's photograph to be taken.
Alan Cook, the Post Office's managing director, said: "We will be the first Post Office in the world to use groundbreaking technology for document and identity verification technology in this way and it puts us in a strong place to use the trusted Post Office brand, our unrivalled network and our experienced staff to bid for other major Government contracts."
The contract follows the decision by the Government in November to renew the Post Office Card Account contract, retaining business crucial for the future of many branches.
The Post Office also announced that Cogent, a company specialising in the supply of high security identification technology, has been awarded a contract to supply and install the new equipment to be used for the enhanced DVLA service.
Mr Cook added: "We are putting a huge effort into equipping Post Office branches with a high-technology capability to handle transactions where strong proof of identity is needed.
"This new service supports DVLA's objectives to reduce paper, increase security and provide improved customer service. We're delighted at the signing of the contract, as it will mean new work and new revenue for the Post Office, and it is great news for drivers as it offers them a faster and more convenient service while providing better value for money for DVLA."
Noel Shanahan, DVLA chief executive, said: "We are delighted to be teaming up with the Post Office to provide this more convenient service to drivers across the country, making it easier for them to renew their photocard driving licence."