Shops and businesses will be allowed to trade around-the-clock throughout central Sydney under a planned bid to transform the city's after-dark economy and encourage more night-time venues.

Small bars will also be able to stay open later in inner city areas such as Glebe and Surry Hills, and buzzing late-night trading precincts will emerge in fast-growing residential areas like Green Square.

Those are among changes the City of Sydney is proposing in response to its first review in a decade of the planning controls that decide trading hours and locations of night-time premises across the city.

Lord mayor Clover Moore said the council's proposed changes to late-night trading were in response to "overwhelming" public feedback in favour of "a diverse and exciting night-time economy".