Sydney's lockout laws to be relaxed as part of two-year trial

Sydney venues providing live entertainment will be able to stay open for longer as part of a two-year trial that could lead to an even greater relaxation of the city's controversial lockout laws.

Demonstrators take part in protest rally against the NSW government's lockout laws and impact on nightlife in Sydney, Sunday, Feb. 21, 2016. Source: AAP

Closing times for venues in the CBD and Kings Cross lockout precincts will be moved back from 1.30am to 2am while the "last drinks" rule will extend another 30 minutes to 3.30am.

The changes, to begin in January, won't apply to nightclubs, karaoke bars or strip clubs.

Takeaway and home delivery alcohol sales hours will be also extended from 10pm to 11pm across the state, Premier Mike Baird said on Thursday.

The changes mirror some of the key recommendations made by former High Court judge Ian Callinan in a report on the laws handed to the state government in September.

Mr Baird said there was no doubt the laws were saving lives.

"At the same time, there's been strong views ... that this has been an impact on live music and the vibrancy of this great city," he said.

The government will review the statistics from the trial annually, with a full evaluation to take place at the end.

"If we see an uptake in violence there's an option to revert to where we were," the premier said.

"But at the same time, if we continue to see improvements in violence or a maintenance of violence at levels that they're currently at, it gives us the capacity to further liberalise these laws."

Small bars in the lockout areas will be able to increase patron numbers from 60 to 100, while closing times will be extended from midnight to 2am under new changes.

But anti-lockout group Keep Sydney Open, which this year organised a rally of more than 10,000 people, labelled the changes "a joke".

"A 30 minute relaxation is an insult to businesses and Sydney's global status.

Mike Baird is in for a rough ride," the group posted on Twitter.

However, the NSW branch of the Australian Hotels Association welcomed the changes, specifically new measures to apply the current three-strikes ban against licencees instead of "bricks and mortar" venues.

The lockout laws were introduced in 2014 following a series of fatal one-punch attacks.

Lockout supporters including emergency-department doctors and police have consistently lobbied the state government to keep them in place and called for the restrictions to be fully extended across NSW.