A self-driving electric ferry set sail in Stockholm on Thursday, making the Swedish capital the world's first city to put the technology to use, the company behind it said.

A captain oversees the autonomous craft but doesn't need to touch the controls, and from Monday, the MF Estelle will begin plying short routes between islands in Stockholm.

Torghatten CEO Stein Andre Herigstad-Olsen said that eventually, the idea is to make the vessel "fully autonomous", with no need for an onboard supervisor.

The system already "sees like a captain", he said.

The boat is fitted with radar, cameras, lidar laser and ultrasonic systems, compiling the data to steer its course, the Norwegian company's operative chief Erik Nilsson said.

"If a boat changes direction or if there's a canoe we see it right away in less than a second. We update the course accordingly," he added.

The first ten-metre boat cost around $1.6 million and will be able to carry up to 30 passengers. A single ticket will cost around $3.

It's hoped the ferry will encourage Swedes to walk or cycle to work rather than taking the car.

The firm wants to increase the number of shuttles in Stockholm and abroad.

The ferry initiative was a private and public cooperation and partly EU-funded.