The extra 60 car parking spaces at 15-17 Kyrle Street, formerly the Car Centre, have been provided after Herefordshire Council reached agreement with the landowner to manage the facility.
Councillor Brian Wilcox, cabinet member for highways and transportation, said: "We are always looking to provide extra car parking in the city centre and this particular site is well located for people wishing to go to either the county hospital or shops in Commercial Road.
"People can park for up to four hours at Kyrle Street so it is also useful for people wishing to go into the city centre," he added.
Planning permission for the car park was granted on condition the facility is managed by Herefordshire Council in accordance with its overall transport policy. In return, the council will receive a proportion of the income from it.
It is a pay and display car park and the usual disabled vehicle and local elderly concessionary exemptions will apply.