It is situated on the Newmarket Line, approximately 600m north of Parnell Tunnel, and is located in the Waipapa Valley adjacent to Auckland Domain.

[6] Three station locations were proposed by ARC staff - including at the Parnell Bridge Overpass, Carlaw Park, and Cheshire Street.

[8] Lobbying by the Parnell Business Association,[9] local residents, and councillor Mike Lee[10] saw the Cheshire Street location chosen for the station.

The new location was suggested in order to serve as a "niche station for visitors to the heritage Parnell precinct and the Auckland War Memorial Museum.

[8][12][13] The early proposal would also integrate the new station with some of the historic railway workshop sheds of the adjacent Mainline Steam depot[14] but nothing eventuated.

[25] Voice announcements onboard train services warn passengers with mobility needs to avoid using Parnell station due to its steep inclines.

[28] In late 2022 Auckland Transport announced it had received consent to construct a second pedestrian underpass at the northern end of Parnell Station, to provide step-free access to all platforms and a more direct way to cross the tracks.