Minister for Racing Paul Toole has today announced that the NSW Government will provide a rare exemption to lockout laws for venues on and around Oxford Street for the 40th Sydney Gay and Lesbian Mardi Gras parade next weekend.

"The NSW Government is pleased to relax the lockout laws as part of its support for the Sydney Gay and Lesbian Mardi Gras Parade," Mr Toole said in a statement.

He continued: "It's an internationally-renowned event that attracts visitors from all over the world and injects around $40 million into the NSW economy each year."

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"Relaxing the requirements will give people more time to make their way to surrounding venues and events when the parade finishes."

The announcement comes as welcome news for party organisers like Kat Dopper, whose monthly LGBTIQ+ party Heaps Gay is set to host a Mardi Gras after party at the Lansdowne Hotel.

"Mardi Gras is arguably the most important night of the year for the LGBTQIA community in Australia and the lockout exemption means that we can celebrate diversity, love and acceptance long into the night," Kat Dopper, who is also a Mardi Gras board member, tells SBS Sexuality.

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"For one night only, Oxford Street will be returned to its former glory. It's an out and proud for locals and internationals alike."

The one-off exemption means patrons can enter venues in the area beyond the usual 1.30am or 2am restrictions, though alcohol service will need to cease at the usual time.

The 40th Annual Sydney Gay and Lesbian Mardi Gras will air on Sunday, March 4 at 8:30pm on SBS.