On Tuesday, City Council passed the motion unanimously.
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The sprawling six-acre site is located off of 1300 Berryessa Road and can accommodate 85 RVs or vehicles.
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According to the city, there are at least 400 living in RV's in San Jose's limits.
Mayor Matt Mahan said this is a win-win.
"This is a very meaningful step forward in our expansion of interim sites and the sooner we move forward quickly and diligently here will have a measurable, notable impact on the state of encampments," Mahan said.
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"We can no longer sit around and say we have to wait to find a location because the biggest complaint we get I think from residents is there are homeless people nearby and we tell them when we have a place we are going to try and relocate them and offer them service," City Council member David Cohen said.
The site will be leased for 10 years.
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A 'safe parking' site means it will be managed around the clock by a social service provider.
Ray Bramson, CEO of Destination Home, said effective sites assess residents and provide the right support for them to find a more permanent place to call home.
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"I'd say this is a good start we know that housing ends homelessness and we know we need to put people into permanent homes," Bramson said.
The total cost is estimated at more than $18 million.
"The city is in the midst of budget negotiations right now," Bramson said. "Next week they're going to be looking at the big general fund source, Measure E, which is for affordable housing and homelessness, so a lot of those questions are going to be answered soon about how we're prioritizing resources and what we're doing in the year ahead."
The safe parking RV site off Berryessa opens on June 30.