Grieve Diamond Jeweller owner James Griffiths said he was surprised and bitterly disappointed about the decision.
The trial had been in place for about 18 months and feedback from customers had been positive, he said.
Although it was difficult to estimate the impact of the initiative on sales, he said the business had probably had an above average increase in monetary value but a "phenomenal" increase in the number of customers making purchases.
"A few retailers I have spoken to feel very let down by these councillors - there had been a commitment to attempt to revitalise the Hastings CBD and this has been vanquished."
He predicted that once the meters were re-activated there would be a negative backlash, and said he hoped the council would see that and consider reversing its decision.
Thomson's Suits owner Angus Thomson said he too was disappointed by the decision.
He said many people, both from Hastings and other areas in Hawke's Bay and the country, had commented that the free parking was fantastic.
"They liked being able to find a park and walk off and do their shopping and have a coffee."
He said that the council was taking away an initiative that had boosted the CBD but had not come up with anything else to replace it.
Hastings City Business Association manager Susan McDade said surveys of customers and retailers conducted by the association had shown the vast majority wanted to keep free parking in Hastings.
"We felt free parking said to the public we want you here, we value you, and that Hastings is a friendly, warm place to come to.
"It's not a monetary thing, people are talking about how it makes the experience of coming to town that much nicer.
"While Napier retailers celebrate this, the small businesses in Heretaunga St are wondering what the Plan B is for the city centre."
Mayor Lawrence Yule said the council invested more than $1 million in ratepayers' money subsidising free parking but the trial had shown there was no difference in retail spend from paid parking.
"Retailers need to understand it has not achieved what it set out to do - there might have been more people in town but there was no extra spend."
He said the council determined this through measuring credit card and eftpos data and was fairly unanimous regarding its decision.
Other trials in New Zealand had also been discontinued for the same reason.
"At the end of the day, while it's a great idea it does not result in increased sales, which is what the CBD needs."
Councillors Sandra Hazlehurst and Malcolm Dixon voted against paid parking, but wanted to bring in new technology such as meter eyes, in-ground parking sensors such as are used in Taupo, and be the same as Havelock North, but even they could see there was no benefit to free parking, Mr Yule said.
"I have used my casting vote twice to keep free parking in place but on the whole the councillors were not supportive."
He said revitalising the CBD was still a fundamental priority for the council, which would be looking at new uses for some buildings in certain blocks as well as other ways to inject vitality.
When paid parking was reinstated, Park Mate would be introduced for on-street car parking for those who preferred not to use coins.
The council introduced the app for its off-street car parks earlier this year, and the system allowed people to pay for parking using an app on their smart phone.
The council would also continue to investigate alternative payment and management options, including eftpos capability and meter eyes.