The council plans to charge diesel car owners 50% extra to park in and around Marylebone from 3 April.
The council said its F-zone parking charge would apply to visitors to Marylebone but resident permits would remain unchanged.
Diesel car owners will pay an extra Â£2.45 per hour for a maximum stay of up to four hours.
The zone - which includes Baker Street, the University of Westminster and Madame Tussauds - will use number plate recognition to identify diesel cars from other types of vehicle.
It comes ahead of City Hall's so-called T-charge, which will see the owners of older, more polluting cars face an extra Â£10 fee for entering the congestion charge zone later this year.
Westminster council said it was launching the pilot scheme in response to residents' concerns about air quality.
It added nitrogen dioxide (NO2) in Marylebone often exceeded recommended healthy levels, as did levels of particulate matter (PM) which cause respiratory diseases such as Asthma.
Local resident Stephen Quinn, who has lived in Marylebone with his family for 20 years, said air quality in the area "was definitely much worse" than in the past.
"We are extremely concerned about the long-term effect that this pollution is having on us, and more importantly, our children," he said.
"We desperately hope that this pilot will go towards making people realise that things must change"
Westminster is to become the first London borough to levy an additional charge on drivers of diesel cars.