Santa will also be there on Saturdays, December 10 and 17, and from Monday to Friday, December 19-23, from 10am to 4pm.
There will be a nominal charge to see him, with children receiving a present and profits going to local charities.
It has been organised by Rugby First in conjunction with The Rotary Club and Inner Wheel Club of Rugby.
Rugby First managing director Aftab Gaffar said: “The grotto is a great way of increasing town centre footfall and each year the numbers of children and families visiting Santa continues to rise.
“Great news for Santa and local businesses at what is an important time of year for them. So why not combine a shopping visit with a visit to the grotto?”
Rotary Events chairman Mark Furber, said: “We really enjoy welcoming so many children to the grotto and providing them with a great and exciting experience.
“At the same time, by attracting families into the town centre we can support local shops in the run-up to Christmas.
“All off the small admission charge goes to charity. The Rotary Club is supporting the Rotary Foundation which helps many good causes at home and abroad.
“The Inner Wheel club’s charity is Fibromyalgia UK and St Andrew’s will be donating to RoSA Support and Families First.”
For further information on Santa’s Grotto and town centre events, go to: www.rugbytowncentre.co.uk