The substantial car park extension will boost capacity for passengers, increasing the current number of spaces to 959, from its current capacity of 737 spaces.
The Department for Transport will provide £1m, working in conjunction with Chiltern Railways, towards the total cost of the £2.5m project.
Work has already started on the new extension to the car park scheduled to be opened by December 2012.
Rail Minister Theresa Villiers said:
"I am delighted that we are able to announce the investment for this considerable car park extension at Warwick Parkway. There is no doubt that this will encourage more people to travel by train.”
"Adding additional car park capacity will mean more spaces for passengers, easing congestion and helping improve overall journey satisfaction."
Together with funding from Chiltern, the Government’s contribution will improve the passenger experience and bring new commuters to the station.
Chiltern Railways became the first UK operator to own and build a new station when Warwick Parkway opened in October 2000.
Business Development Director for Chiltern Railways, Graham Cross said:
"The launch of our Mainline service between London Marylebone and the West Midlands has resulted in record growth levels and a dramatic increase in passengers travelling from Warwick Parkway. The new multi-storey car park will meet the rising demand and demonstrates our commitment to offering the best service to our customers."