NSW pubs, clubs and restaurants will be able to have up to 50 customers at a time from June 1, under a new easing of restrictions announced today.
Venues will still have to comply with the one person per four square metre rule and social distancing guidelines will remain in place.
But Premier Gladys Berejiklian said the move was about safely bringing back thousands of jobs.
"This decision has been made with expert health advice and both businesses and patrons will be subject to strict rules and guidelines," Ms Berejiklian said.
"All customers must be seated and no bookings of more than 10 allowed, in addition to many other conditions which must be met."
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Deputy Premier John Barilaro, Treasurer Dominic Perrottet and Customer Service Minister Victor Dominello are heading up the government's roadmap for reopening the economy and have worked extensively with both the Australian Hotels Association and ClubsNSW.
"This is a game-changer right now," Mr Barilaro said.
"As we continue to deal with the aftermath of the devastating bushfires, continued drought and COVID-19, it's important for people to find a way to enjoy themselves and take a break from the daily pressures they are facing.
"A morale boost and the additional economic stimulus provided by pubs and clubs is what our communities need and I look forward to enjoying a beer in the bush with locals very soon."
Mr Perrottet said there were about 280,000 people employed in this sector of the economy and allowing venues to safely cater for more customers would provide "another boost to business and jobs".
"NSW is opening back up for business, and as we ease restrictions everybody needs to follow the health and safety guidelines, to ensure we make it a success and can continue," he said.
The government said the AHA and ClubsNSW had confirmed their members would comply with all conditions stipulated by NSW Health.
Patrons have been advised to check with the venue before attending to ensure they will be able to attend.