Covering an area of 1,500 square meters, the area will span four streets around Binh Tay Market in District 6, a long-standing symbol of the ethnic Chinese community in HCMC.
The night street will feature stalls offering Chinese cuisine, souvenirs and cultural art performances.
It will be open to tourists every day at 6 p.m.
City authorities said the night street will be funded by private enterprises through bidding and they added that they hoped it would be a tourism attraction that would develop a night-time economy.
Binh Tay Market was built in 1928 by a rice trader from China. The market, famous for its clock tower and a central courtyard, is a popular tourist destination in HCMC.
The city already has three no-vehicle areas, the center strip on Nguyen Hue Street, Bui Vien Street in District 1, and around the Quang Trung Monument in District 10.
HCMC welcomed 3.4 million international arrivals last year, around 30% of pre-pandemic levels. This year, the southern metropolis is targeting 5 million arrivals.