The single-storey short-stay parking area with a capacity for 100 cars, including disabled bays, closed last month on July 10 following damage caused by rain deluge.
It opened in place of the former multi-storey market car park for the first time in November last year.
Repair work started on Monday (August 9) and is expected to continue until end of the month.
The car park is expected to reopen from September.
A spokeswoman for Peterborough City Council said: “The car park surface was damaged during the deluge of rain on or about July 10.
“For safety reasons the car park was closed until an engineering inspection could be carried out to ascertain the damage and the cost of repair. This inspection has now been completed and the repair is approved.
“Work starts on Monday (August 9) and is due for completion around the end of August.”