The changes, announced on Thursday, will remove 1.30am last entry for venues in the state capital's CBD and remove restrictions on cocktails, shots and drinks in glass after midnight. Last drinks in venues with a proven good record would also extend by 30 minutes in the Sydney CBD.

Across the state, from January 14 bottle shop hours will extend to midnight from Monday to Saturday and to 11pm on Sundays. Small bar capacity will also increase from 100 people to 120.

While industry figures have applauded the changes, health bodies were strident in their condemnation.

Royal Australian College of Surgeons trauma chair Dr John Crozier hit out on Thursday, arguing that takeaway sales extending to midnight on weeknights and 11pm on Sundays held dangers.

"Yet another extension in the hours of trade in takeaway liquor is a significant breach of trust with vulnerable members of the community," Dr Crozier said.

"As surgeons, we plead for the Berejiklian government - which had declared reduction of domestic violence as a priority commitment - to do the right thing [and] maintain an 11pm moratorium on takeaway liquor sales."

The Sydney lockout laws were introduced in 2014 in response to alcohol-related deaths, including that of Thomas Kelly after he was struck in a one-punch attack in Kings Cross in 2012.

Mr Kelly's father Ralph in May told the Sydney Morning Herald he would not be opposed to the laws being relaxed or repealed as long as the city remained safe.

"I do think we need these reviews because if it stands at the end of three months that there is enough evidence that the link between alcohol and violence has decreased, and that we are now deemed to be a city which is safer for everyone to enjoy the amenities of its nightlife, then I guess it is 101 that we should relax or completely pull out lockout laws," Mr Kelly said.

The Australian Orthopaedic Association (AOA) also expressed "unequivocal disappointment" over the government's Thursday announcement that laws would change in Sydney's CBD.

AOA president Dr Andrew Ellis said the body expected to see an increase in both alcohol-related road trauma and domestic violence due to the changes.

"The likely outcome of the relaxation of laws is that we see an increase in the alcohol fuelled violence levels last seen prior to the introduction of the lock-out laws in 2014," Dr Ellis said.

"The AOA believes there is no doubt that the NSW Government has heeded the voices of the alcohol industry rather than of victims of alcohol fuelled violence.

Dr Ellis said there were 25 per cent fewer patients with serious alcohol-related facial injuries at St Vincent's Hospital after the laws were introduced, and the number had more than halved over two years.

"The lockout laws were successful and have had important public health benefits, with not one alcohol-related assault death at St Vincent's Hospital in Darlinghurst since the laws rolled out," he said.

"The only mitigation [to rolling them back] is to employ more police, more ambulance officers, more child protection workers, more surgeons, more hospital staff and more emergency workers.

"How will this be possible with already straining health and emergency service budgets?"

The Newcastle Herald reported on Friday that Australian Hotels Association NSW Newcastle president Rolly de With and the body's chief executive John Whelan had welcomed the change, describing it as a "turning point" that could lead to relaxation of restrictions in Newcastle, where the 2008 lockout laws remain in place.

"We hope this decision made by the state government will act as a catalyst in allowing Newcastle the chance to also move forward without the interventions of the past," Mr de With said.

The repeal has bipartisan support in state politics, with the Berejiklian government's decision coming days after NSW Shadow Treasurer Walt Seccord described the laws as a disincentive to tourism.

"It is time the Berejiklian government faced facts and accepted lockout laws are hurting the NSW economy. They should be repealed," Mr Secord said on Monday.

"We see the economic storm clouds gathering over NSW and unemployment has jumped from 4.5 per cent to 4.8 per cent in October. Lifting lockout laws in the CBD would provide a much needed stimulus.

"It would mean more business, more customers and extra staff. This would be a big win for the community, patrons and the struggling economy."

Premier Gladys Berejiklian on Thursday announced the changes but noted the lock-outs could return if violence or other behaviour spiked in their absence.

"Sydney has transformed dramatically over recent years, and we need to ensure we have a strong and vibrant night-time economy that reflects our position as Australias only truly global city," Ms Berejiklian said.

The announcement of the changes doubled as a response to a Joint Parliamentary Committee.

That report made no recommendations on the need to extend takeaway bottle shop sales hours but "accept[ed] that alcohol causes harm".

It recommended Kings Cross was not yet ready to have the laws removed but that the lockouts be lifted in areas including Oxford Street and the broader Sydney CBD "with appropriate urgency".

A Deloitte estimate that the city was foregoing $16 billion annually was also cited in the finding that "as a result of the 2014 laws, Sydney has an underperforming night time economy".

Following a detailed review of the Joint Select Committees recommendations, we will implement changes over summer to ensure Sydney has a thriving, safe and diverse night life that can be enjoyed by all," she said.

Minister for Jobs, Investment, Tourism and Western Sydney Stuart Ayres said winding back the restrictions would boost Sydney's night time economy.

"It's time to embrace a 24-hour economy that creates jobs, fosters arts, culture, live performance and safety on our streets," Mr Ayres said.

"You don't have to trade safety for liveability but we all need to take responsibility for making Sydney the best it can be."

The Foundation for Alcohol Research and Education said it feared the government would regret its decision.

"Delaying the decision to relax alcohol trading and sales until after the busy festive season, smacks of tacit acknowledgement that greater alcohol-fuelled harm is on the horizon," FARE policy director Trish Hepworth said.

"This is a reckless and populist decision ... inevitably resulting in higher levels of consumption, which the science has proven causes greater harm."