Work is expected to begin early next year to add two levels to the State Street parking garage after the Knoxville City Council approved a $9 million plan for the parking project during their meeting Tuesday night.
The garage is located behind the Regal Cinemas Riviera movie theater.
Council members said as they city's downtown business grows, there needs to be more parking to meet customer demand.
"We're meeting that market demand, and it's just one more way for our downtown to become more vibrant than it's become in the last 8 9 10 years," said council member Nick Pavlis.
The city hopes to start building in March, and construction is expected to last about a year.
Also during Tuesday's meeting, the city council approved a tax break for the developer renovating the old South High School.
Dover Development Corporation will receive a 25-year payment in lieu of taxes, or PILOT, on the building. Dover is converting the historic property into an assisted living center.
The facility will hold 60 apartments and an Alzheimer's care unit, and will bring 35 jobs to the area.
The building has been vacant since 1991.