British online grocer Ocado said it will invest £10m in autonomous vehicle software company Oxbotica as part of a tie-up that aims to reduce the cost of last-mile delivery and other logistics.

The partnership would include all aspects of autonomous vehicle development, Ocado said.

However vehicles that operated in low-speed urban areas or restricted-access areas, such as inside its fulfilment centres, would become a reality sooner than fully autonomous deliveries to consumers' homes.

The two companies started working together 2017 when Ocado conducted a two-week trial using an early prototype vehicle doing autonomous deliveries in Greenwich, London.

Oxbotica, based in the university city of Oxford, has developed software that brings full autonomy to a vehicle regardless of the vehicle type and the environment in which it operates.

It also has built a cloud-based system that controls, audits and monitors autonomous fleets.

The tie-up will initially focus on Ocado's UK operations and then extend to international markets where grocers use its online retail platform, such as in the US, where it partners with Kroger.

Ocado will take a seat on Oxbotica's board after the investment, which was part of a larger funding round led by BP's BP.L technology investment arm bp Ventures and including China's Tencent among others.

Oxbotica's co-founder Paul Newman said the two companies would share their visions for the future of autonomy.

"By combining both companies' cutting-edge knowledge and resources, we hope to bring our universal autonomy vision to life and continue to solve some of the world's most complex autonomy challenges," he said.