A meeting of Fylde Council on Monday had been recommended by its officers not to lower charges due to the "serious financial position" now faced by the authority.
But members went against the recommendation and agreed to one of three tariff options on the table.
Traders who attended the meeting at Lowther Pavilion cheered the decision.
The decision will result in charges of:
•£1 for four hours (currently £1.80), no change over four hours, for the long stay car parks at North Promenade, St Annes and Lytham Station, Lytham, at a cost implication of £1,130 to the council.
•£1 for up to two hours (currently £2.30), £1.50 up to three hours (currently £3.60), over three hours no change, for the short stay car parks at St Annes Square, St Annes, Wood Street, St Annes and Pleasant Street, Lytham, at a cost implication of £13,000.
•Operating hours 9am-4pm (currently 9am-6pm), at a cost implication of £700.
John Strong, chairman of Lytham Chamber of Trade, said it was too little too late.
"I would be happier if it was free," he said.
"Difficult times and difficult decisions. Gordon Brown has done his bit, locally the council can do theirs. The competition is the shopping centres where there's free parking.
"We need more parking, cheaper parking and to get rid of the over zealous traffic wardens.
"It's a bit late to be doing this."
However, Arnold Sumner, co-ordinator of St Annes Chamber of Trade, said: "It's a positive move. What we would like, of course, is free parking over Christmas, but the traders in St Annes will obviously be delighted there's some help and we are working with Fylde Borough Council and Lancashire County Council trying to get the parking situation improved in St Annes."
The reduced charges are set to take effect from next Wednesday until January 4.