As well as indicating carbon dioxide emission levels, the labels give motorists information on how much they can expect to pay in fuel bills in a typical year and whether the car qualifies for a reduction in Vehicle Excise Duty (car tax).
The system, which is similar to the labels currently displayed on fridges, was unveiled in Guildford, Surrey, by Transport Minister Stephen Ladyman.
Although the scheme is voluntary, more than 40 major car brands have signed up for it, With Guildford leading the way today, labels will appear in cars in all showrooms by September 1. The National Society for Clean Air and Environmental Protection (NSCA), which had campaigned for the scheme, welcomed its introduction.
Tim Brown of NSCA said: "It's good to see the UK motor industry taking the lead in providing environmental information to consumers. Motorists can help fight climate change by choosing lower-carbon models, and it will now be easy for them to spot the real gas-guzzlers."
"However we are determined to see that all manufacturers will comply with the scheme - particularly those with high-emitting models. Any companies which do not participate fully run the risk of being named and shamed.
Only electric cars fall into category A - the "greenest" category - where the vehicle excise duty (VED) annual bill is £65. Category B includes such vehicles as the Ford Fiesta 1.4 diesel and the Citroen C2 1.4 litre diesel, and the VED bill for these cars is £75.
Category C, with a VED bill of £105, includes the Fiat Panda 1.2 and the Ford Ka 1.3, while category D, with VED of £125, includes the Mini and the Ford Fiesta 1.6i. The Ford Mondeo 1.8i and the Vauxhall Vectra 1.8 are among the cars in category E where the VED is £150. Category F, where the VED bill is £165 a year, includes the Land Rover Freelander 2.0 diesel and the Jaguar X-type 2.0.
Fuel costs based on doing 12,000 miles a year, range from £486 for the category A Honda Insight petrol electric hybrid to £3,040 for the category F Lamborghini Murcielago 6.2 litre.