The initiative, which will run on the three weekends in Oswestry before Christmas, was unanimously agreed by the town council’s finance and general purposes committee at a meeting on Monday evening.
Free parking will apply to all car parks owned by the town council – central, the Horsemarket and Smithfield Street – and follows similar schemes in previous years.
Town clerk Arren Roberts told members that free bus travel was also being proposed this year after the council agreed that promoting public transport should be one of its priorities following the local elections earlier this year.
It will apply to the town service operated by Tanat Valley.
Councillor Les Maguire said: “Anything like this that benefits the town and the market and the shops has got to be beneficial.”
Councillors unanimously voted in support of the initiative.
It is estimated that the town council will lose around £3,000 in car parking revenue, and the free bus travel offer is expected to cost £500.
A report by Mr Roberts to the committee said: “There is clearly a significant different in cost to the council between free car parking and free bus travel.
“Once the data (ticket numbers) and final cost to the council has been collated in January 2022, Members may wish to expand the offer of free bus travel and reduce the subsidy of free car parking.
“The final cost to the council will be based on the number of tickets issued for chargeable journeys and an adequate audit trail will be required.”
Shropshire Council has also offered free Christmas parking in previous years but is yet to announce plans for this year.