The scheme is going ahead following the award of a £105,000 grant from The Customer and Communities Fund at West Midlands Railway.
The main attraction will be a fully-restored rail carriage converted into a café and community hub set within a newly-created leisure garden, Incredible Edible planting boxes, outdoor seating and a greenhouse.
Local mining heritage will be celebrated with a restored coal wagon and secure cycle racks will create an integrated travel hub for visitors and local people.
David Wisehall, chairman of the Heart of Hednesford Station Adoption Group, which is leading the scheme, said it would be a fantastic new resource for the town.
“This is an ambitious and unique project for the town centre,” he said.
“The community hub will make productive use of an area of disused space at the edge of the town car park that adjoins the railway station.
“This will be a unique venue and a fantastic place for community groups to meet.”
Mr Wisehall said there was much to be done to clear the site that runs between the station and the old Co-op car park, off Anglesey Street before work could begin. The mosaic mound would be removed to make way for the project, which is being called Hednesford Completely Off The Rails.
He said volunteers would be sought to help bring the ambitious scheme to fruition with possible employed positions available as the project develops.
He added: “The scheme will be both environmentally- and disability-friendly, with the carriage being accessed by ramp and step-free access.
Mr Wisehall said the total value of the project is predicted to be in excess of £150,000, with the bulk of the funding coming from the Customer and Communities Improvement Fund and additional funding from other sources. The group aims to have the work completed by the start of Birmingham 2022 Commonweath Games in July next year.
“The cream of the Commonwealth countries' mountain bikers will descend on Birches Valley in Cannock Chase and we are the nearest station, so we’re hoping that our renovated rail carriage will be open for visits in time to welcome global visitors,” he said.
“We would hope to be able to use renewable sources of energy where possible and harvest rainwater for the flower beds and plants on the platforms and in the garden.
“We will also erect a greenhouse in the garden to grow our own plants for use on the station and also as a source of revenue.”
Fay Easton, head of stakeholder and community for West Midlands Railway, said: “This inspired concept will provide a centrally-located community hub amenity for the town centre and will also convert a 'waste' piece of ground into a striking setting for a vintage railway carriage which will bring visitors from miles around.
"The community group work tirelessly for the benefit of Hednesford and West Midlands Railway have been honoured to work with the volunteers over the years as they have enhanced the platforms at the station and we now look forward to supporting where we can as the group bring this visionary project to life."
For further information about the scheme, visit the Heart of Hednesford Station Adoption Group Facebook page facebook.com/theheartofhednesford/.