Commuters have been able to park for free at any non-bitumen carparks near train stations around Perth until formal processes for constructing sealed carparks is finished.
The $2.9 million Guildford contract will more than quadruple the number of bays available.
But commuters using the park- and-ride facility will have to pay $2 a day.
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READ NOWJaxon Civil is expected to begin construction early this month of an extra 350 parking bays directly opposite the existing 118-bay carpark.
Transport Minister Dean Nalder said the contract included construction of a bike and pedestrian path linking Johnson Street and the western pedestrian crossing.
"These extra parking bays will make public transport an even more attractive option for the residents of Guildford and surrounds," Mr Nalder said.
"Now that the tender has been awarded, the project can kick into high gear and be completed later this year.
"Adding parking bays and making public transport an even more attractive option is just one of the ways this Government is improving the transport network."
East Metropolitan Region MLC Alyssa Hayden said the additional parking bays would alleviate pressure on side-street parking during the week.
She said when people flocked to Guildford on weekends, parking was always at a premium.
"During discussions with local residents on the Guildford Hotel restoration, the lack of parking was a real concern, especially for retailers in the area," Mrs Hayden said.
East Metropolitan MLC Donna Faragher said the new section of path would provide a safer alternative for cyclists and pedestrians.
"It builds on the recently completed Principal Shared Path between Bassendean and Success Hill train stations," she said.
Mr Nalder said the State Government had already exceeded its election promise of 3000 new car parking bays on the Transperth network by more than 2000.