Officials in the Village of Stewart Manor in Nassau County voted to curb the plan Tuesday night.
They had planned to start charging teachers $50 per month to park at the Stewart Manor School.
Teachers, who have parked there for free for decades, were furious about the new fee.
It's estimated the village would have made nearly $20,000 a year if teachers and administrators paid for parking at the school.
The change in policy had been approved by the Stewart Manor Village Board last month.
"That's kind of the last thing we want to do to these teachers," said Cory Voras, a resident.