Drivers will start paying for parking around the Orange Plaza, the City Council has decided. The changes will likely take effect this fall.

The City Council approved a plan to charge $1.25 per hour for city parking lots and $1.50 per hour for street parking in the eight city blocks closest to the plaza. The city will charge $2 per hour in marked parking spaces around the traffic circle, itself.

Street and garage parking east of Grand Street and west of Lemon Street, including in the largest city lots, will remain free.

City staffers recently told councilmembers it could take up to nine months for the procurement and installation of a new paid parking system.

The system could cost $700,000 to install, a city document said.

The Police Department will also explore ways to beef up parking enforcement, which Chief Dan Adams said is “very, very minimal” for the time being.

The city expects to net around $1.2 million annually from parking fees once the system is up and running — city officials are grappling with a systemic deficit in the city’s budget.

In addition, city officials expect Old Towne merchants to benefit, too. A recent Old Towne parking study funded by the city said paid parking and a two- or three-hour parking time limit in metered spots will improve circulation around storefronts and restaurants, leading to more business.

The Orange Chamber of Commerce supports the plan.