The 11-seat bus, whose capacity has been cut to four due to COVID-19, started its long-awaited trial along Wharf Road on Monday, carrying politicians, journalists and curious members of the public from Customs House to Nobbys beach and back.

The natty electric vehicle, made by French firm NAVYA, has a maximum speed of 17.9 kilometres an hour during its three-month trial but can go faster.

It uses 360-degree cameras and a range of sensors to avoid cars and objects and navigates using a global positioning system.

The Newcastle Herald rode along on one of the bus's first journeys, where it moved ponderously yet safely through busy pedestrian crossings and roundabouts.

The vehicle was far more circumspect around possible hazards than a human driver.

It waited longer at roundabouts to assess the intentions of other cars, rolled gently around those roundabouts and at one point lurched to a sudden stop after mistaking an oncoming car for a pedestrian on a zebra crossing.

But, when it did misjudge, it was always on the side of caution.

Newcastle private transport operator Keolis Downer is running the trial for City of Newcastle. Its technicians will learn from data gathered over the next three months to finetune the vehicle.

Driverless buses have been trialled at a retirement village in Coffs Harbour, a university campus in Armidale and around Sydney's Olympic Park at Homebush.

South Australia had a five-year trial running on public roads on the outskirts of Adelaide until COVID-19 intervened, and the Victorian government, Keolis and La Trobe University ran a successful trial of a NAVYA bus in 2017 and 2018.

Newcastle's trial was due to begin earlier this year on a wider route but was delayed due to COVID-19 restrictions on public transport. It can now carry three passengers plus a Keolis Downer "chaperone" required under government approvals.

The chaperone can take control of the vehicle using a remote control, but the bus is designed to be fully autonomous.

The Newcastle Herald understands the council has extended its initial 12-month contract with Keolis to allow the trial to take place.

Deputy lord mayor Declan Clausen, who took the first ride at Monday's media launch, said the council hoped to expand the route subject to state government approvals and the success of the trial.

"It was really exciting. It was the first time I've been on an autonomous vehicle," Cr Clausen said.

"It navigated the course really well. I was pretty impressed, particularly with the roundabouts at both ends, because as a driver they're a bit logistically complicated, and the bus did really well to navigate with lots of vehicles.

"There was no risk-taking, that's for sure. It was a very cautious drive.

"It does brake a little harder than I was expecting."

Keolis Downer Hunter general manager Mark Dunlop said the vehicle had performed "extremely well" during a testing period last year without passengers and was "extremely safe".

Travel on the bus is free. It is running on weekdays between 10am and 2pm.