We have investigated the illumination effect on the magnetotransport properties of a two-dimensional electron system at the LaAlO$_3$/SrTiO$_3$ interface. The illumination significantly reduces the zero-field sheet resistance, eliminates the Kondo effect at low-temperature, and switches the negative magnetoresistance into the positive one. A large increase in the density of high-mobility carriers after illumination leads to quantum oscillations in the magnetoresistance originating from the Landau quantization. The carrier density ($sim 2 times 10^{12}$ cm$^{-2}$) and effective mass ($sim 1.7 ~m_e$) estimated from the oscillations suggest that the high-mobility electrons occupy the d$_{xz/yz}$ subbands of Ti:t$_{2g}$ orbital extending deep within the conducting sheet of SrTiO$_3$. Our results demonstrate that the illumination which induces additional carriers at the interface can pave the way to control the Kondo-like scattering and study the quantum transport in the complex oxide heterostructures.