Outdoor stages will be set up in key locations around the CBD, with Cr Moore previously announcing the city was intending to pay for musicians to play at venues.

The state is contributing $15 million towards a range of initiatives encouraging people to return to the city, with the City contributing $5 million.

Mr Perrottet said the state would continue to invest as much as it could.

The announcement is among a cache of projects designed to bring the city out of its COVID-19 slump, including an al fresco taskforce looking at relaxing outdoor drinking and dining regulations, as well as the state government encouraging its own workers to return to their offices.

Mr Perrottet said some of the initiatives, including bringing Sydney’s hospitality industry outdoors, should have occurred in the past and businesses had been mired in pointless red tape.

Cr Moore said she hoped the city would transform to be similar to various famous piazzas in the Mediterranean.

“Wouldn’t it be fantastic if this could become permanent,” she said.

Mr Perrottet said the government was continuing discussions with health officials regarding halving the four-square-metre rule to allow venues to increase their capacities, following calls from the hospitality industry.

Longer retail trading hours, more flexible or free transport options, and allowing cultural institutions to stay open longer were among other ideas floated at a recent government summit.

The City of Sydney has also prepared a pilot to help bring bars and restaurants outdoors, including onto the street along thoroughfares such as Crown St in Surry Hills and Pitt St in the city.

A section of Barrack Street, off George Street, would be closed, while hospitality businesses would be able to sprawl into Tankstream Way and Wilmot Lane to enable them to accommodate more customers than presently allowed under COVID-19 restrictions.