Already known as Melbourne's Little Italy, Carlton is bracing for a new wave as the second hospitality crew in a week announces plans to open an Italo-American joint in the neighbourhood.

This week, the team behind Ramblr and Leonard's House of Love will get the keys to the former Da Salvatore Pizza By the Metre at 29 Grattan Street, about 600 metres from Bar Liberty's side project, Capitano.

Nick Stanton, Mark Catsburg, Jon Harper and Guy Bentley will start work soon on Leonardo's Pizza Palace, which they say may take up to six months to renovate.

Stanton says they've been working on the concept for the past two years, looking at sites across Melbourne. But as soon as they saw Da Salvatore, they knew they'd found the one. "It has great history and great bones."

Mining inspiration from visits to old-school places such as New York City's Rubirosa and Carbone, and Jones in Los Angeles, they'll sling red-sauce Italian dishes like spaghetti and meatballs and veal parmigiana, and thin, crisp Italo-American pizzas – but none by the metre.

The front bar will seat about 70 at high tables, and a "hidden" dining room – named Salvatore's Dining Room after former owner Salvatore Mercogliano – will seat another 50. They're planning a neon sign to mark the separate Drummond Street entrance.

Leonardo's Pizza Palace is expected to open by Christmas.