City of Newcastle councillors voted on Tuesday night to scrap outdoor dining fees for all restaurants and cafes from July 1.
The move is aimed at encouraging more outdoor dining and will save inner-city businesses $115 a year for every square metre they host patrons outdoors. The saving amounts to $65 a square metre for other areas of the city.
The council said restaurants and cafes would save a total of $130,000 a year based on the existing space used for outdoor trading.
"Waiving outdoor trading fees will hopefully encourage cafes, restaurants and other eateries to expand trading onto footpaths," lord mayor Nuatali Nelmes said in a council statement.
"We hope this will give the local dining scene and surrounding businesses a boost."
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The council waived the fees in the east end in the second half of 2017 to help businesses struggling during Supercars track construction works.
The council issued 129 approvals for outdoor trading in 2018-2019, generating $129,421 in revenue.
The move to waive the fees follows a recommendation in the 2019 NSW Outdoor Dining Policy prepared by the state's small business commissioner.
The council said the $170 one-off fee for installing permanent footpath markers indicating new outdoor trading areas would remain in place.
