The 1.30am lockout and 3am last drinks measures for licensed premises in Kings Cross and the Sydney CBD could be relaxed for live entertainment venues to restore the "vibrancy" of the areas, the first review of the laws has found.

In a report handed to the NSW government on Tuesday, former High Court Judge Ian Callinan said a 2am lockout and 3.30am last drinks in venues with live entertainment could be trialled for two years.

He also said the government could consider shifting the the state-wide ban on takeaway alcohol sales after 10pm to 11pm and for home delivery to midnight.

But Mr Callinan warned that any relaxation of the lockout and last drinks laws "carries the risk of greater density and consumption of more alcohol" in Kings Cross and the CBD.