Pubs, clubs and restaurants will be allowed to seat up to 50 people from June 1, as part of the NSW government's next stage of relaxing coronavirus restrictions.

Kooringal Hotel manager Brendan Johnson welcomed the announcement and said his staff would await the start of next month with excitement.

"Personally, as a country person, I know that hotels are the life and blood of country towns," he said.

"In terms of sporting clubs, schools, it's going to allow us to get back to what we are there to do: support the community."

Mr Johnson said being able to seat 50 people would make a dramatic difference to his pub's revenue.

"[We'll be] trying to get back in being profitable as a business but also serve the customers and allow them to come in and socialise ... within social distancing measures," he said.

Under the new rules, pubs must allow for four-square-metres of space per person and bookings cannot be larger than a group of 10.

All patrons must be seated, with mingling, dancing and buffets to remain off-limits.

The Australian hospitality sector has more casual workers than any other industry, many of whom have been ineligible for the federal government's JobKeeper payments.

The Kooringal Hotel, which was operating with 29 employees before coronavirus hit, had to temporarily stand down 13 casual staff who weren't able to take part in the JobKeeper program.

Mr Johnson said extending the pub's capacity to 50 would allow him to reassure all of his staff.

"It'll give them security as well, that they will have employment on the other side of this. It allows me to go hey guys we're back as a team ... as laws and restrictions continue to relax I've always stayed in contact with all my staff," he said.

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Australian Hotels Association CEO John Whelan called the new limit "a common sense move", one that would be particularly welcomed by regional NSW hoteliers.

"The entire hospitality sector has been hard hit by the COVID-19 crisis with hotels shut down across NSW and 94 per cent of our workforce of 75,000 stood down or terminated," he said.

NSW Business regional manager Andrew Cottrill welcomed the new rules.

"It coincides with our calls for the regional economy to be opened back up," he said.

"It was also great to see the opening up of tourism in NSW at the same time ... [which] will allow pubs and clubs to take advantage of people travelling around our region and kick-starting our economy again."