The new laser - which would be mounted on the cars - will be able to spot upcoming hazards in a street even if they are entirely hidden from view, according to new research published in the journal Nature.
This will allow the driverless vehicles to know that a child or animal has run onto the road before it makes a sharp turn.
Gordon Wetzstein, professor of electrical engineering at Stanford University, said: "It sounds like magic but the idea of non-line-of-sight imaging is actually feasible.
"If your car could look around the corner it could make decisions, probably more reliably and further ahead of time.
"This is a big step forward for our field that will hopefully benefit all of us."
The laser would shoot pulses of light onto a wall which would bounce off onto objects hidden from view which would send back an image in less than a second to the car.
Although it wouldn't be a very clear image, it would show whether there was an obstruction in the road.
Doctoral student David Lindell, added: "A benefit of our algorithm as well is that it is compatible with existing scanning systems so you can take our system, apply it to these existing systems and be able to apply this non-line-of-sight imaging."