At a meeting of the Dhaka Transport Co-ordination Authority (DTCA) on Wednesday, he said efforts were on to have 3,000 new buses to replace old ones in over a year.
Bus owners had been persuaded to run such buses as franchisees, he said.
At present, 4,500 buses run on 194 city routes, added the Mayor.
He said there would be five routes in Dhaka city, each having buses of a designated colour.
The mayor said the bus owners had agreed to run the system on a profit-sharing basis.
Huq said steps were being taken to give low-interest loans to bus owners to help them buy new vehicles.
Road Transport and Highway Department Secretary MN Siddique said the possibility of introducing a common ticket for buses, trains and other modes of public transport was being explored.
Bangladesh Road Transport Authority (BRTA) Chairman Nazrul Islam suggested that all new buses should have over 40 seats.
Housing and Public Work Minister Engineer Mosharraf Hossain said cars were being parked on roads in various parts of Dhaka, while a parking building in Gulshan went empty.
Huq proposed a fine of Tk 5,000 for unauthorised parking.
Transport Minister Obaidul Kader, Rail Ministry Secretary Md Firoz Salah Uddin, DTCA Executive Director Md Kaikobad Hossain were present at the meeting.
