The Hodge Hill MP says thousands of jobs could be created on the former LDV site - with his ward suffering among the highest levels of youth unemployment in the country.
He said a committee hearing at the House of Commons heard that HS2 would create fewer jobs than suggested at a marshalling yard planned for Washwood Heath.
He believes up to 6,500 jobs could be created on the site the size of 100 football pitches to aid an unemployment epidemic in the surrounding area that shows no signs of abating.
Labour MP Mr Byrne also warned that the city would be forced to look at the green belt to claw back industrial land.
The result would be to “concrete over” the Sutton countryside “destroying one of the most beautiful parts of Birmingham”, he warned.
Mr Byrne said that, under pressure at the committee, HS2 representatives admitted they had not factored in the loss of 1,300 jobs from businesses already on site who would be forced to re-locate.
He said: “HS2′s jobs argument has collapsed this morning. They have been forced to admit that their evidence to Parliament was at best a half-truth, and at worst, completely misleading.
“Even the Government now admits that we could create an extra 4,000 jobs in Hodge Hill in the short term. It’s time HS2 now gets serious about giving east Birmingham a boost and not a battering. We’re fighting for jobs – they should be with us and not against us.
“They should certainly come clean to Parliament about the costs of their plan to jobs, lost taxes and lost business rates to the city. The phoney war is now over.”
Mr Byrne has previously said the land represented a third of all industrial land in Birmingham and that owners had already been approached by potential developers. The plan for the site, put together by the city council, would mean skilled jobs.
Instead, from about 2026, the site will be used by HS2 to clean and maintain trains. Until then, it is expected to be used as a yard to store materials during the construction of the line.
The site lies at the junction of Ladywood, Erdington and Hodge Hill – three constituencies which are home to more than 40 per cent of the city’s unemployed.
A Department for Transport spokesman said: “We are confident of the overriding strength of the case for locating the depot at Washwood Heath.
“We have always been very clear that the depot would create 640 jobs with the potential for more jobs through construction works and businesses using the residual land.
“Both Birmingham City Council and Solihull Metropolitan Borough Council do not support the alternative proposals because of the associated impacts, including the loss of potential jobs and the significant impact on green belt land without any good justification.”