Sydney's World Bar has become the first venue in Kings Cross to gain a trading extension until 3.30am, marking the NSW Government's move to relax the state's lock-out laws even in areas of the city where alcohol and drug-related violence had caused the need for decision-makers to implement the legislation in the first place.

Last year, the Hon Ian Callinan AC QC, following the independent statutory review of liquor laws in the state, declared a two-year trial of later 2am lockouts and 3.30am last drinks for CBD and Kings Cross venues that offer live entertainment.

The Stonewall Hotel on Oxford Street was also granted the same extension this week, bringing the total to five venues now allowed to trade until 3.30am in Sydney. The Palace Hotel, ArtHouse Hotel and the Observer Hotel had their applications approved in January.

“Stonewall and World Bar demonstrated a genuine orientation towards live entertainment. Live entertainment helps provide more diverse nightlife options," said Minister for Racing Paul Toole.

Applications from a further 15 venues are currently being assessed by Liquor & Gaming NSW.

“I’m pleased there has been such a strong response from the industry to our Government’s relaxation of lockout laws.”

Liquor retailers can now also sell alcohol up to 11pm, while some small bars in the CBD and Kings Cross have been granted an automatic extension of trading to 2am and the patron limit from 60 to 100.