The mayor of London has launched a £42m fund to help remove the oldest "dirty" diesel black cabs from the capital.
Up to £5,000 will be paid to cabbies for retiring diesel powered taxis between 10-15 years old. No new diesel taxis will be licensed from January.
City Hall says the scheme will cut pollution in central London by 45% by 2020.
Campaigners have warned that drivers still face financial penalties for moving to zero-emission capable taxis.
Research suggests taxis are responsible for 16% of the nitric oxide and 26% of the particulate matter (PM) road transport emissions in London.
The fund will be made available for drivers de-licensing their cabs, which prevents the vehicle from being used as a taxi in the future.
An owner de-licensing a 10-year-old taxi would receive the highest amount of £5,000, scaling down to £1,200 for a vehicle coming to the end of the 15-year age limit.
However the Licensed Taxi Drivers' Association argue payments will simply replace funds taxis drivers could have raised for selling on fully licensed taxis.
The Mayor of London, Sadiq Khan, said: "London's filthy air is a health crisis that needs urgent action.
"I hope this fund helps deliver a new generation of zero-emission taxis on our roads and paves the way for the Government to offer a diesel scrappage scheme so all London motorists can ditch their dirty diesels."
Deputy chair of the London Assembly's Transport Committee, Caroline Pidgeon, said: "Tackling the price of electric taxis is central to their high take up."
She called on the mayor to "drive down the cost of electric taxis by bulk purchasing a large number and then selling and leasing them to drivers and garages".