By William Boston
Updated Nov. 20, 2017 12:22 p.m. ET
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Volvo Cars said it has agreed to supply Uber Technologies Inc. with a fleet of 24,000 self-driving taxis beginning in 2019—one of the first and biggest commercial orders for such vehicles.

The deal between Volvo, owned by China’s Zhejiang Geely Holding Group Co., and Uber was disclosed Monday as a framework agreement without financial terms. Such an order, though, would account for about 4.5% of Volvo’s current total sales, based on 2016 figures, and is estimated to be worth just over $1 billion, a person familiar with the situation said.

The automobile industry and many big tech firms have promised broad deployment of robot cars in the near future, but all of the technology, regulation and legal framework needed for the practical use of such vehicles aren’t yet in place. Still, industry executives have predicted with more and more confidence that companies could have such cars on the road in a matter of years, not decades.

Other car makers have inked smaller, less specific deals to develop and produce autonomous cars, but Monday’s agreement represents one of the most concrete deals between two big players in the field for the production of a large number of real cars. The promised delivery date--as little as two years away--is also one of the first hard, deadlines that a significant automaker has set for rolling out a working model.

Volvo has had a long-running partnership with Uber to develop self-driving cars, though it hit a setback earlier this year. Pilot projects around the U.S. were temporarily halted after an early version of a Volvo-Uber-developed vehicle flipped on its side after an accident in Tempe, Arizona. Police said the incident was caused by a human driver of another vehicle, not the Uber self-driving car.

“We believe this is a new segment, a new business,” said Volvo Cars Chief Executive Hakan Samuelsson. Jeff Miller, Uber’s head of auto alliances, said the agreement “puts us on a path towards mass produced self-driving vehicles at scale.”

Under the agreement, Volvo will supply Uber with what Mr. Samuelsson called a “base car,” based on Volvo’s popular XC90, a luxury sport-utility vehicle that seats up to seven passengers. Delivery of the vehicles is set to begin in 2019, with Uber calling up vehicles each month through 2021.

“The base vehicles incorporate all necessary safety, redundancy and core autonomous driving technologies that are required for Uber to add its own self-driving technology,” Mr. Samuelsson said. “Uber will adapt the software to make it ride-hailing.”

The first taxis from the deal will be built in Volvo’s factory in Sweden. But the company plans to produce the vehicles in the U.S. as well, where Volvo is building a new factory just outside Charleston, South Carolina.

The current version of the XC90, which is available for sale today, already includes advance autonomous features, such as systems to keep the car in its lane and maintain the proper distance to another vehicle traveling ahead. It also features collision avoidance that helps prevent low-speed fender benders in stop-and-go traffic.

Other car manufacturers are racing to develop their own models of self-driving vehicles, often in ventures with parts suppliers and big technology companies.

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Daimler AG, which makes Mercedes-Benz luxury cars, and auto supplier Bosch GmbH, for instance, said in April that they would jointly develop their own robot taxi. Daimler has said the vehicle would become available at the beginning of the next decade.

Daimler and Uber said in January they would join forces, with the German company agreeing to introduce self-driving cars compatible with Uber. Waymo, the self-driving tech unit of Google-parent Alphabet Inc., has agreed to take several hundred minivans from Fiat Chrysler Automobiles NV, part of its autonomous driving program.

Nutonomy Inc., a Cambridge, Mass. startup, has said it wants to put a fleet of robot taxis on the street by next year. It first began testing Renault and Mitsubishi vehicles, in Singapore. In May, it agreed to work with Peugeot maker Groupe PSA of France, to integrate its software into a Peugeot SUV.

Volvo and Uber agreed in 2016 to jointly develop more advanced self-driving car systems. The accident in Arizona was a blow to public perception of the pace of development of the program and such vehicles generally. But police said at the time that the Volvo-Uber car was not at fault. The accident occurred when the driver of another vehicle committed a moving violation, ramming the self-driving car and causing it to flip on its side.

There were no injuries, but Uber temporarily halted its three robot taxi tests in San Francisco, Tempe, and Pittsburgh. Those pilot programs have resumed.

—Tim Higgins in San Francisco contributed to this article.

Write to William Boston at william.boston@wsj.com