It is currently unsealed but soon three-quarters of this will be covered with asphalt and the remainder, the dining area, with heavy-duty pavers that can also take vehicles.
Adjoining businesses will be able to set out furniture in the evenings.
As the parking is leased, there will be no impact on the general parking public.
"This is a win/win for council and residents as it tidies up a sad space within the city and gives us valuable social space that can also be utilised as an event space during the Arts Festival and other community events," councillor Wendy Schollum said.
Outdoor spaces have been high on the agenda for Hastings District Council.
Consultation on the Hastings City Centre Public Spaces Revitalisation Plan showed residents, city workers and the business community wanting more places to relax, gather and dine in the city.
"Claiming back and transforming otherwise lifeless areas of our CBD is what will help to continue to grow vibrant activity in our city's heart. The multi-purpose car park area is sure to be extremely popular in summer when so many of us like to enjoy our evenings outside in the fantastic Hawke's Bay climate," Schollum said.
"Beautiful spaces like these are what lift our spirits and bring vibrancy to our city."
