The 120-capacity Bar Mellow owned by Prudence Farquhar and Byron Marzinotto is the first small bar to open since the extension of relaxed liquor-trading restrictions in Newcastle earlier this year.

It's located on the corner of Bellevue and Hunter streets in Newcastle West.

"We are the first small bar to be approved since the end of the small bar trial, so that's really exciting for us because I personally worked hard on that trial alongside Newcastle Council and Tim Crakanthorp," Ms Farquhar said.

Bar Mellow offers an extensive wine list of predominantly natural wines from the Hunter Valley and Australia, along with cocktails and deli-style bar snacks.

The couple launched their first bar Blue Kahunas in Hunter Street Mall three years ago.

"It is very different to what we do at Blue Kahunas," Ms Farquhar said.

"This bar is very relaxed, mellow, a little bit sophisticated, a little bit elevated and we also want people coming in here to feel like it's an inclusive, safe space."

The couple designed the fit-out of the venue which features a U-shaped bar at the centre of the space with orange upholstered booth seating along the sides and hand-painted murals on the walls.

The bar will operate from 4pm to 1am, Wednesday to Saturday, and is limited to 50 patrons during Covid-19 restrictions.

"I think it's really exciting and important for small bars to be opening up at that capacity to be able to trade late," Ms Farquhar said.

"Having options to go to after dinner that are not just a pub or a nightclub, it's something that is lacking in Newcastle and we believe having diversity is important."