The six-month trial is taking place on the 344 route, which runs between Clapham Junction and Liverpool Street.
Transport for London (TfL) says the introduction of digital information boards in the back windows of buses could help both drivers and cyclists, to avoid congestion.
The plan is a “world first”, according to Garrett Emmerson, chief operating officer for surface transport at TfL.
He said: "This innovative use of one of the capital's most iconic features – the London bus – will help all road users.
“We're focused on keeping London moving and on giving drivers real-time information through a range of channels to help them avoid congested roads and reduce wasted time and needless pollution from idling cars.”
The move could also prevent drivers from using their mobiles to find traffic updates while behind the wheel.
The buses will use GPS technology to provide accurate and up-to-date traffic information taken from TfL's 24-hour traffic control centre.
Craig Holloway, Chief Executive of Equitech IT Solutions, who will fit the boards, said: “We know how beneficial having real-time traffic information can be for road users, and the technology we have developed will hopefully make life for Londoners easier by having up-to-date information provided to them when travelling on the Capital's roads.”
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If it proves a hit with London’s road users, the plans are to expand it to the 415 route between Tulse Hill and Liverpool Street in the autumn.
After another six-month trial here, it could eventually spread across the entire city.
London’s bus network is one of the largest in the world with over 8,000 scheduled buses operating on over 700 different routes. Over the year, it facilitates over 1.8 billion passenger journeys.
The digital information boards on the buses have been installed specially for the job, so won’t cut into TfL’s advertising revenue.
Some bus stops are also now showing air quality alerts to highlight London's worst pollution spots.