NEW YORK >> New York City’s transit system took a significant step today toward replacing the MetroCard with a more modern way for passengers to pay fares — by waving cellphones or certain kinds of credit or debit cards at turnstiles in the subway or fareboxes on buses.

A committee of the Metropolitan Transportation Authority approved a $573 million contract for a new fare payment system adapted from the one in use for several years on the London Underground and London’s commuter railroads. New electronic readers will be installed in 500 subway turnstiles and on 600 buses in New York beginning late next year, and will reach the rest of the city’s subway stations and buses by late 2020.

“It’s the next step in bringing us into the 21st century, which we need to do,” said Joseph J. Lhota, chairman of the transit authority. “It’s going to be transformative.”

The move toward the new fare-payment system came in a disastrous year for the subway system, with delays on every line, rush-hour malfunctions strangling the system and worse: a train derailed in Manhattan in mid-June, injuring dozens of people and raising concerns about whether the subways were still safe. Service deteriorated so much that Gov. Andrew Cuomo declared a state of emergency.

The issues involved in making the trains run involved the antiquated infrastructure in the tunnels and on the tracks and did not involve collecting fares. But officials see the new system as a way to make getting into subway stations and onto buses faster. That could bring more passengers into a system that is already straining to handle the loads it carries every day.

The new system will replace the MetroCard, but MetroCards will not be phased out until 2023 — 30 years after they replaced tokens for subways and buses. Until 2023, passengers can pay their fares the new way or the old way, with a MetroCard. The new system will also process fares for the Long Island Rail Road and Metro-North commuter lines.

The most obvious difference will be what passengers do to go through a subway turnstile or board a bus: wave or tap a smartphone or a credit or debit card, instead of swipe a MetroCard.

The system will work through apps like Apple Pay, Android Pay and Samsung Pay as well as “contactless cards” — credit or debit cards with embedded chips that rely on a wireless technology known as near field communication, or NFC.

“The millennial generation, those who are more prone to new technology, will be our greatest users in the early stages,” Lhota said. He added that card issuers “are going to want to be a part of it” and would add the near-field technology “when they realize that 5.8 to 6 million people in New York City are getting on the subway every day.”

Lhota said another potential advantage was that fare readers could be installed by the back doors on buses to “allow for all-door boarding.” That would let buses pull away from bus stops sooner than they do now, reducing travel times.

The transit agency is hiring the same company that designed the system in London, which is also the company that developed MetroCards a generation ago. But the new system will let passengers pay as they go, in contrast to the MetroCard system, which requires them to pay in advance, whether they want a single ride or a month’s worth.

The new system will not mean the end of the flat fare that has defined the New York subway system since it opened in 1904. Fares on the London Underground are based on distance, as they are in some other cities that use similar technology, like Washington. But Lhota said he was not contemplating changing the fare structure for the subways. (The Long Island Rail Road and Metro-North do charge by distance, using zones that usually include several stations.)

Thomas K. Wright, president of the Regional Plan Association, an influential nonprofit group, praised the move to the new system, predicting that ridership would increase once the new fare system was widely available, just as it did after the MetroCard was introduced.

He called the new fare system “a real win-win and an important step for the MTA to be taking.”

The transit agency has been talking for years about replacing the MetroCard, which made its debut when Bill Clinton was president (and the basic fare was $1.25, $1.50 less than it is now and $1.75 less than with a single-ride MetroCard).

The transit agency ran a pilot program for a successor to the MetroCard in 2006. Officials hoped to do away with MetroCards by 2012 and believed that contactless bank cards would be the way to the future. But while such cards were popular in Europe, they did not immediately catch on in this country.

Lhota said there had been “a firm commitment on high, first from Tom Prendergast” — his predecessor, Thomas F. Prendergast — “and now myself, to get this done.”

“It just takes focus from on high to see it get done,” he said, “and it’s going to get done.”

The contract for the new fare system approved Monday will now go to the authority’s board for a vote Wednesday.

The transit authority sought bids for the new system and chose Cubic Transportation Systems, the company behind the MetroCard, from among five proposals.

Cubic signed a licensing deal in 2016 with Transport for London, the transit agency for greater London, that allowed Cubic to take the technology developed for London to other cities.

But calls about New York’s new fare payment system, once it is installed, will be answered nearly 400 miles away, in Buffalo. Cubic plans to open a call center there, putting jobs in an area that is struggling economically but is important politically to state officials like Cuomo, who controls the transit agency.