The city council has taken the lead by offering three of its parking lots at no cost for late night and Sunday shopping.
The authority hopes other car park owners will follow suit in an attempt to lure people back into the city centre after the damage done by Covid.
Two busy roads - Orchard Street and the section of Friargate between the Flag Market and Ringway - will also be closed to traffic from 5:30pm to 9:30pm from December 1 to Christmas Eve to help create a pedestrian friendly shopping zone.
The "Free After Three" parking scheme follows a plea from Preston BID (Business Improvement District) to help give retailers and the hospitality industry a festive boost as they try to bounce back from the pandemic.
The city's cabinet has approved the plan to stimulate the local economy and increase footfall in stores and restaurants during the month of December.
But it will only apply to its three smallest and least-used car parks, costing the authority around £4,000 in lost revenue.
Town Hall bosses say they cannot afford to include all council sites because the authority needs the cash they generate - more than £700,000 a year - to fund other services.
"Free car parking is seen as an important part of the package of measures that are put in place to both stimulate demand for local businesses and best manage the impacts of this demand on the highway network and car park facilities," said a report to the cabinet.
"It is particularly important this year to both support the local economy and manage demand in light of the COVID-19 pandemic to allow visitors to safely visit the city during quieter periods that the late night opening offer provides."
The council car parks offering free stays are Penny Street, off North Road, the temporary market car park at Tenterfield Street and Trinity Square car park off Great Shaw Street.
The offer will be available after 3pm on Wednesday/Thursday/Friday from December 1 to 17. Parking will also be free all day on Sundays December 5/12/19.
In addition the car parks will offer after no cost parking after 3pm on Saturday November 20 for the city's Christmas lights switch-on and also late nights Monday December 20 to Thursday December 23.
The council is hoping that, as in previous years, larger car parks owned by St George's Shopping Centre, the Fishergate Centre, Lancashire County Council and UCLan will also take part in the free scheme to make it a happy Christmas for local businesses.
"The festive free parking initiative has proved hugely successful in the past, being popular with both customers and retailers alike," adds the cabinet report.
It says that free parking was also considered in the council's other larger car parks, "but a balance needs to be struck between encouraging and supporting local trade and the need to meet car park income budgets that in turn may support other council services."