Drivers of older diesel cars in London face an additional daily penalty of £10 ($13.20) to drive in the center of the city in a new program launched today.
The T-Charge will apply to those cars which do not meet Euro IV emission standards, and will operate during the same times as the existing congestion charge - Monday to Friday between 7am and 6pm.
Speaking to Sky News, Khan said: "We don't make a profit from the T-charge - it's costing us".
It is due to be replaced by a stricter Ultra-Low Emission Zone in 2020, although Mr Khan is consulting on bringing this forward to 2019.
The T-Charge is on top of the congestion charge, which was put in place in 2003. "The shameful scale of the public health crisis London faces, with thousands of premature deaths caused by air pollution, must be addressed", London mayor Sadiq Khan said in a statement.
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"We urgently need a programme of meaningful financial assistance to help drivers of the dirtiest vehicles switch to something cleaner, and bold policies to cut traffic over all", Friends of the Earth pollution campaigner Jenny Bates said.
The new scheme is part of the city's effort to curb pollution and improve air quality - the London Atmospheric Emissions Inventory recently found that nearly 95% of Londoners reside in areas exceeding World Health Organization guidelines for air toxicity by 50% or higher.
Sue Terpilowski, a spokesperson for the Federation of Small Businesses, told the news site: "The introduction of the T-Charge comes at a time when small and micro-businesses in London are already facing astonishingly high property, employment and logistics costs".
About 438 schools in London are in areas exceeding legal air quality levels, according to the London mayor's office.