The plan was announced by Oliver Morley, chief executive of the DVLA, who posted an image of a dummy version on Twitter.
Mr Morley said there was no firm timeframe for the new feature but hinted that the move was being made possible by the scrapping of the paper counterpart of the licence last year.
With almost everyone in the country carrying a smartphone with them and the DVLA’s increasing use of online functions, experts say the move is the next logical step for licensing.
In a second tweet Mr Morley said that the digital version would be an add-on to, not a replacement for the current photocard licence. He also stressed that, given the potential vulnerabilities of smartphones, security was the DVLA’s main priority.
It has been suggested that the licence could function using Apple’s Wallet app. The Wallet app already allows users to store digital versions of credit, debit and store cards and boarding passes on their phone.