The move follows years of sustained criticism over Sydney’s stringent ‘lock-out laws’ which opponents say are destroying the city’s nightlife. Some 175 businesses have closed since the laws were introduced.

The boost includes a $500,000 grants fund to be split between seven Sydney precincts to support street festivals, events, arts and entertainment and $1 million to support the presentation of contemporary acts and increase participation in live music events across the state.

The seven Sydney precincts to benefit are Darlinghurst, Haymarket and George Street, Parramatta, Liverpool, Newtown, Opera House to Walsh Bay, and Pyrmont.

A new type of pop-up liquor licence will be trialled from March and an expert advisory panel will be established to advise Government of ways to integrate liquor and planning approvals in an effort to reduce red tape and make it easier to start and grow licensed businesses in NSW.

The panel will also look at ways to encourage more roof top bars across Sydney.

“Sydney is one of the great world cities and has a long tradition of music and entertainment that’s to be celebrated,” said minister for racing Paul O’Toole.

“This funding could support the late-night opening of cultural institutions, including galleries and museums, pop-up venues and installations, along with food and drink options and community events.

“Sydney has some great roof-top bars, enjoyed by locals and visitors alike. Let’s take full advantage of the best cityscape and outlook in the world – if you’ve got it, flaunt it.”

NSW arts minister Don Harwin argued the funding for live music across NSW would assist with staging gigs, festivals and other music events across the state which will “help to contribute to a vibrant night-time economy”.

“Whether it’s a one-off gig, outdoor event or series of club nights, we’re eager to enable more opportunities for contemporary music across our cities and State,” he said. “I encourage venues, promoters and musicians to come forward to apply for this opportunity.”

Mr Toole said a three-month blitz on outdated licence conditions, such as limitations on types of music that can be performed at a venue, is currently underway. “There might be conditions remaining on some licences that no longer serve a purpose, so affected venues have the opportunity to have them removed, free of charge.”