These venues will no longer have to serve spirits with mixers.
"Those who appreciate fine whisky in a relaxed, intimate small bar setting would sooner go without than be forced to dilute their favourite drop," Toole said.
Small bars will also be able to sell cocktails not listed on the menu after midnight.
"Bartenders are rightly proud of their trade, and by removing this restriction, we are encouraging Sydney’s small bars to innovate and flourish.
"Small bars are adding to diversity of Sydney’s nightlife, allowing patrons to relax and socialise in an intimate and sophisticated setting."
The changes recognise small bars in Sydney have good compliance records and a low risk of alcohol-related violence.
Their lower patron limit makes it easier for staff to monitor patron behaviour. Liquor & Gaming NSW will monitor the changes to ensure no rise in alcohol-related violence.
The changes follow the statewide increase in the small bar patron limit from 60 to 100 and extended trading for small bars in the CBD and Kings Cross from midnight to 2am.
Other changes to liquor regulation in effect from 1 October include:
- Implementation of the new Three Strikes disciplinary scheme whereby strikes are attached to licensees rather than to the premises.
- An extension of the liquor licence freeze in the Sydney CBD and Kings Cross until June 2018, but giving venues greater flexibility to refurbish their premises.
- Changes to improve the effectiveness of the Minor Sanctions Scheme targeting venues that serve minors, and the annual liquor licence fee system.