SYDNEY - Australia's largest city Sydney will undergo a hospitality facelift to aid with its recovery from COVID-19, with officials slashing restrictions on outdoor dining and 24-hour entertainment.

City officials revealed Thursday they would partner with the state government to "cut red tape" and make it easier for businesses to utilize unclaimed spaces such as laneways and footpaths to create outdoor dining precincts.

Sydney Lord Mayor Clover Moore said the vision to turn Sydney into a 24-hour alfresco city had been in place for several years, and that in the aftermath of COVID-19 the city needed it more than ever.

"Over the last decade we have proposed the light rail and helped create a pleasant, people-friendly George Street, we have paved laneways and campaigned for small bars," Moore said.

"Now by removing fees and red tape and working with businesses to find as many outdoor dining opportunities as possible, we're supporting COVID-recovery while realizing our vision of an alfresco city."

Sydney's nightlife has been notoriously quiet since the implementation of strict lockout laws, which remained in place from 2014 until early 2020 with the intention of curbing alcohol-related violence.

While violent incidents in the city center declined, so too did Sydney's culture, which was left with nowhere to flourish under a plethora of rules and restrictions.

COVID-19 came as another hit for the hospitality sector, which has been among the most heavily impacted by both the virus and anti-violence regulations.

"Having brunch with friends, a wine after work or grabbing a quick bite and watching the world go by are some of the best moments of urban life," Moore said.

"We need to allow and encourage businesses to operate outdoors, and we need to support our creative and cultural life to activate and draw people back to our city, safely."