The ‘Access for York’ project will aim to reduce traffic congestion through the creation of a new 600-vehicle facility at Poppleton Bar and doubling the size of the park & ride at Askham Bar to 1100 spaces.
Overall project value is £22.7m.
Balfour Beatty will construct the terminal buildings and redevelop a former landfill site as part of the Askham Bar expansion, a designated Site of Importance to Nature Conservation.
Access improvements at local road junctions also form part of the works, which start this month and complete in spring 2014.
Councillor Dave Merrett, cabinet member for transport, planning and sustainability at City of York Council, said that the project was the city’s biggest investment in transport infrastructure since the northern ring road was built.