Small bars will be allowed to deliver cocktails directly to Sydney's doorsteps from Tuesday, as the NSW government lifted the licensing restrictions around supply of alcohol by licensed venues.

Customer Service Minister Victor Dominello signed an order on Monday afternoon allowing licensed venues in the state, including restaurants, cafes, pubs, and bars, to provide takeaway and home delivery services.

Fabrizio Culici and Tess Robens from The Rio Bar in Summer Hill bottle cocktails for home delivery. Credit:Steven Siewert

The move hands a potential lifeline to the small bar industry, which was effectively shuttered on Monday as the federal government ordered the closure of non-essential services – including pubs and clubs – to stop the spread of coronavirus.

As restaurants and cafes across Sydney scrambled to pivot to takeaway-only service, small bars appeared fated to fall into a regulatory gap, their trading halted by NSW's alcohol licensing conditions.