Social care staff and health service volunteers will also be exempt from parking charges.
Frontline workers will also be able to use council parking bays without time restriction or charge, Local Government Secretary Robert Jenrick has promised.
The new free parking on council land for health workers, social care workers and NHS volunteers will apply to all on-street parking and open, council-run car parks including pay and display.
Mr Jenrick said councils will set up arrangements so those eligible can provide suitable evidence to display in their windscreen and avoid a ticket.
He said: "Our NHS staff and social care workers are working round the clock to save lives and should not have to worry about the cost or time restrictions of parking."
Private company the National Car Parking Group has also said it will provide NHS staff free parking at all 150 of its sites in England.
Ministers are now urging other businesses and organisations located near hospitals to work with their local NHS Trusts to consider allowing NHS staff use of their car parks.
Many councils and NHS Trusts have already suspended parking charges for key workers during the coronavirus pandemic.
But parking enforcement will continue for everyone else throughout the lockdown to ensure roads remain clear for emergency and essential services.
The announcement came after mounting public pressure, with over 400,000 people signing a Change.org petition for the fees to be scrapped.
Anthony Gallagher, an NHS GP, set up the petition as a way of thanking NHS staff for their ‘‘bravery to step up in our nation's hour of need."
Dr Gallagher said: “I am in no doubt that the government did not begin this week intending to cover all parking charges for NHS staff.
"This is a massive success, thanks to all the hundreds of thousands of people who signed my change.org petition.
"I hope after this nightmare has passed, that the government will still notice how NHS workers go above and beyond EVERY day.
"It would not be reasonable, at that time, to give them all a pay-cut and reinstate parking charges. I am optimistic that the government will do what is right and scrap these parking charges permanently."
The campaign shows how people coming together in a crisis can create meaningful change for those on the frontline.
The government said Health Secretary Matt Hancock would give immediate financial backing for all NHS trusts to provide free car parking to NHS staff for the duration of coronavirus (COVID-19).
The Local Government Secretary has also agreed for local councils to offer free car parking to all NHS workers and social care staff during the coronavirus outbreak.