The NSW Deputy Premier and Justice Minister, Troy Grant, said the government had decided to extend the ban while it reviews the O'Farrell government's sweeping 2014 changes to trading hours for pubs and clubs.

"We want […] to have certainty and confidence that nothing will change while we conduct this major review," Mr Grant said.

The Baird government begins this month its review of the lockout laws which forbade licensed venues from accepting new patrons after 1.30am and serving alcohol at 3am.

"Once the review is complete the government will have a firmly stated position about the future of lockouts," Mr Grant said.

The review will consider perspectives from emergency service workers and some criminologists, who have praised the laws for reducing crime rates, and the business lobby, which argues the changes have been devastating to Sydney's hospitality industry and nightlife.

Doug Grand, a spokesman for the Kings Cross Licensing Association, said the extension would only further depress the once-thriving nightclub district.

"We have had 13 venues close since the lockout laws commenced [in 2014]," Mr Grand said. "Reinvestment and regeneration is desperately needed in the precinct".

New licences in the Cross were first banned in 2009.

That was extended to an area covering much of the CBD in 2014, with the reforms introduced following high-profile instances of  alcohol-fuelled violence.

The ban mostly affects pubs and clubs. Restaurants and small bars are covered by different regulations.

Businesses may exchange existing licences, but the laws forbid the creation of new licences.

A study last June by the state's crime statisticians found the laws had reduced the rate of assault in Kings Cross by one-third and the CBD by one-quarter.