The Tesco Extra branch, on Bell Street in Stourbridge, had allowed people attending Stourbridge Town Hall to use their car park as part of a goodwill agreement.
Theatregoers could stay for two hours – initially three before it was reduced – but could often stay for the duration of the show as long as they informed the store.
However it was revealed earlier this year the arrangement had come to an end, with the supermarket citing customers not being able to find spaces.
But now an agreement has been reached – after negotiations were called out by council bosses and Tesco – to allow visitors to park for four hours between 6pm and 11pm and for two hours at any other time.
Councillor Steve Clark, deputy leader of Dudley Council, said: "We have successfully negotiated with Tesco to ensure visitors to the town hall can continue to use the car park.
"The town hall has thousands of visitors each year and is a long-standing entertainment venue, which plays a vital role in the town’s night-time economy.
"It has to be said that we were disappointed with the decision Tesco had made earlier this year, but we are pleased to have secured extended evening parking for residents as this is when the majority of shows at the town hall take place."
The council has been in negotations with Tesco since it made the move earlier this year, with there being a "mutual understanding" visitors could use the car park for extended periods in the evening – due to it being built on the site of a former council multi-storey car park.
Councillor Cat Eccles, who represents the Wollaston and Stourbridge Town Ward, said on social media: “Fantastic news for the community! Tesco Stourbridge have agreed to re-instate free parking for Town Hall visitors in the evenings.
“Over 1,000 local people signed a petition asking Tesco to reconsider, and they heard us! As well as a varied schedule of shows, the Town Hall hosts a number of local groups and societies who have struggled to find alternative parking. A big win for everyone.”
People using the car park can usually use it for more than two hours for free since 2015 and before that for three hours. The supermarket was built on the site of a former multi-storey car park which was demolished to make way for it.
A spokesman for Tesco previously said shoppers at the store had found it “difficult to find parking spaces”.
Tesco has been contacted for comment.