The card, which removes the need for cash when buying tickets, is the first of its kind in the UK. Oyster aims to provide faster passage for the six million users of London's transport network.
Smartcard equipment has already been fitted on 6,000 buses and at more than 250 tube stations and 28 mainline rail stations in the capital.
A spokesman for Transport for London said, "We see Oyster as the start of the end of endless queues on Monday mornings - people will be able to gain quicker access on to buses and through tube gates."
He also expects to see a decline in the amount of travelcard-related fraud and theft. "If someone steals an Oyster card we can deactivate it immediately and they are left holding nothing more than a piece of plastic."
Annual and monthly adult season ticket holders in the capital can use the card after registering and paying in advance over the internet or by telephone. However, all annual and monthly ticket holders will be able to get an Oyster card from ticket offices and retail outlets later in the summer.
All 350,000 annual and monthly ticket holders are expected to be issued with an Oyster card within a year.
In addition to the underground, buses, tramlink and docklands light railway, Oyster can be also be used on national rail within the six zones of greater London. TfL is still in discussion with the train operating companies about integrating the Oyster card with a national rail scheme.
The London smartcard has been designed and is being managed by the TranSys consortium of companies for TfL and London Underground.