King Street car park in Stanford-le-Hope will no longer offer free parking after Thurrock Council was served with a termination notice by the car park's operator.
RCP Parking is set to introduce number plate readers, which means that the existing contract with the council to provide 2 hours free parking is no longer possible. The contract will end on Monday 30 September.
The council is reviewing all possible options to assist businesses and residents in the area.
Cllr Ben Maney, Cabinet member for highways, said: "We are extremely disappointed that RCP Parking have withdrawn their agreement and residents will no longer have access to free parking but we are working hard to mitigate this.
"Having received notice of the contract, and following feedback after the introduction of the Parking Permit Area, we are investigating a number of options to ensure the impact on both residents and local businesses is limited as much as possible. We will continue to consult with the local community."
The council is investigating the provision of additional limited waiting bays within the recently introduced Stanford-le-Hope Parking Permit Area. Proposed options include further limited waiting bays in Wharf Road, Rectory Road and Salisbury Road, as well as bays in Central Road and Scratton Road.
Thurrock Council will undertake statutory consultation on the proposals for additional limited waiting bays.