Durham County Council introduced a £2 charge for drivers, using a rising bollard and payment/ticketing machine on a busy historic city centre street. It is monitored by CCTV and linked to an intercom system. Vehicles can enter a loop road leading up to the city's historic cathedral and face the charge when leaving.
The area is particularly susceptible to congestion because it is situated on a thin peninsula created by a bend in the River Wear.
A county council spokesman said the move had reduced traffic levels in the street from about 2,000 cars to 200 cars per day, with half of those being permit-holders who do not have to pay the charge.
The county council said about one motorist per day refused to pay the charge but that nobody had yet been fined.
It plans to introduce a £30 penalty soon.
Next month sees the introduction of the London congestion charge. Coming into force on February 17, motorists will be charged £5 per day to enter the centre of London.