The council formally approved the scheme, which will apply to the 500 employers in the city with ten or more parking spaces, yesterday.
Under the scheme, companies will have to pay Nottingham 75p per day for each parking space.
The scheme, which is due to come into force in April 2010, is designed to generate£5m in the first year of operation rising to£12m by 2015. The council wants to use the revenues to pay for improvements to public transport, including an extension to the city’s tram network.
Approval for the Nottingham levy follows the collapse last week of a wider congestion charging scheme for the east midlands.
6Cs withdraw from congestion charge
Six council leaders and cabinet leaders from Nottingham, Leicester and Derby and the surrounding counties, collectively known as the 6Cs, decided against further research into road user charging after Derby and Nottingham councils withdrew their support.
A£1.8m study, paid for by the government’s Transport Innovation Fund investigated introducing a charging scheme.
Nottingham leader, Cllr Jon Collins (Lab), said: "The recent report on the potential of road pricing was very interesting, it was sensible to conduct that study, but ultimately it fails to convince us - we still believe that a levy will bring congestion benefits in a way that is more simple, fair and better targeted at commuters than road user charging.”