Kinondoni District Commissioner Paul Makonda said he hopes to expand the scheme across the entire city.
The trips on the “daladala” bus taxis will be paid for by the city’s associations, echoing a scheme where soldiers travel for free on buses.
Mr Makonda set up the scheme after First Lady Janeth Magufuli visited a local school in February.
Teachers greeted the news with smiles and proudly showed the new ID cards showing they are entitled to free transport to the BBC’s Tulanana Bohela in Dar es Salaam.
Kinondoni, which has a population of over one million, currently provides students with 50% discount on travel and has around 35,000 teachers.
The ID cards are expected to be available for 3,000 teachers by the end of the week.
Journeys which normally cost around 400 shillings (18 US cents; 12p) are free between 05:30 and 08:00 and 15:00 to 17:00 to those holding the special card.