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.
Jaxon 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.