It allows authorities and Transport for London to charge utilities companies up to £2,500 per day for works on the busiest roads at the busiest times.
Schemes need to be approved by the Secretary of State for Transport before they can become operational.
Camden and Merton have already introduced lane rental after it launched in Enfield and Lambeth earlier this year.
Deputy Mayor for Transport, Seb Dance, said: “The Mayor and I are determined to improve bus journey times and cut congestion for all road users, which is why we’re delighted the capital’s Lane Rental scheme continues to expand across London. By encouraging streetworks to take place collaboratively and outside the busiest hours, we’re minimising disruption while generating funding for further innovation that keeps the capital moving.
“This scheme is a key part of our new approach to managing London’s streets more effectively – using technology and smarter infrastructure to cut congestion, improve safety and speed up journey times on the bus network, as we continue building a greener, better London for everyone.”
