Customers who park outside Seacroft Green Tesco and leave to use other facilities in the area will no longer be fined.
There was uproar in the area when people who parked outside Tesco and went to use the post office, Seacroft Community Hub and Leeds City College at Deacon House, were slapped with £60 fines, rising to £100, for leaving the confines of the retail park.
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A four-hour limit - enforced using numberplate cameras - remains in place, but wardens will no longer punish people for leaving the retail park on foot within four hours.
Motorists first started complaining about getting fines and not knowing why earlier this year.
A petition calling on Tesco to scrap the changes set up by Samvarta Bandyopadhyay, the operator of Seacroft Post Office, and was signed by more than 1,000 people.
The fact that the Post Office logo is still on the shopping centre sign only added to the confusion.
Local councillors David Jenkins, Katie Dye and Paul Drinkwater campaigned against the changes, and MP Richard Burgon wrote to Tesco CEO Dave Lewis, demanding an end to the 'unfair and unnecessary' charges.
The land has been leased to Tesco by Leeds City Council and campaigners believe Tesco should not punish people who use the car park to access community services.
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Tesco had said it wanted to stop people using the car park as a park and ride to get into Leeds.
But Cllr Jenkins said he was told only around 12 people were doing this and said an arrangement could have been made with them.
"Tesco have used a sledgehammer to crack a nut," he said.
"It has caused hell for some people. We've had 89-year-olds getting tickets for going to the post office and students fined while they are at college.
"The whole thing has been a farce. These are all public services that people are using, it's not as if they are private competitors."
He also called on Tesco to refund all fines that were given out to people who were using community services.
A Tesco spokesperson said: "Following feedback from customers and the local community we have made changes to the parking restrictions to allow parking for four hours at our Seacroft store.”