People with a fear of heights will be exposed to powerful VR scenarios.
TalkingSpace Plus is running the ground-breaking psychological treatment in our county.
VR is also being offered by Healthy Minds to patients with the phobia in Buckinghamshire.
The two services are among the first in the country to offer the state-of-the-art therapy to treat a fear of heights - which is a significant problem for one in five people at some point in their lives.
Most never receive treatment though.
TalkingSpace Plus will target people experiencing low mood, anxiety and stress as part of the NHS pilot.
Patients will be gradually and systematically exposed to powerful virtual reality scenarios that trigger their symptoms.
Because they don't have any of the perceived real-life dangers, patients have the confidence to try things they would normally avoid, enabling them to overcome their fears and negative thoughts.
Users have reported finding therapy easy to engage with and even fun to use.
They also get a virtual therapist; a friendly computer-generated avatar, voiced by a real person, who carefully guides the patient through the therapeutic work.
An NHS therapist will be available in the room during treatment sessions too.
People who received the therapy spent an average of two hours in VR over five treatment sessions.
They all showed a reduction in fear of heights, with the average reduction being 68%.
Jo Ryder, clinical lead for TalkingSpace Plus in Oxfordshire, said: "Fear of heights can have a significant impact on the way people live their lives but many people never seek treatment - instead they avoid the thing which makes them afraid.
"This VR pilot will enable them to stop adapting their life to avoid their fear and their experience of the treatment will influence the way it is rolled out across the UK."
VR to treat a fear of heights is just one of the ways virtual reality technology is being developed for medical use by a team led by Oxford Health NHS Foundation Trust consultant psychologist and researcher at the University of Oxford's Department of Psychiatry Daniel Freeman and the University of Oxford spin-out Oxford VR.
Daniel Freeman said: "We've got to let go of the idea that therapy can only be done face-to-face and recognise the huge gains tech interventions can potentially provide.
"This new method delivers the best psychological therapy in virtual reality using an avatar coach. Our clinical trial shows the method gives results at least as good as, if not better than, face-to-face therapy."
He said Oxford will be showing how VR can be scaled up into NHS mental health trusts across the country.
Retired paramedic Richard was able to look over the balconies of Oxford's Westgate Shopping Centre after completing VR therapy, something he would never have been able to do before.
He said: "I lived with a debilitating fear of heights for all of my life and had to organise my life so that I completely avoided all situations that exposed me to heights and altitude as I would experience intolerable anxiety.
"Since have the VR-enabled therapy I can now go to my local shopping centre and I am able to freely walk around and go to all floors and even look out over the balcony.
"This is something that would been simply impossible for me to do before having this treatment."