What a time 1860 was for Port Melbourne. The name became official (formerly Sandbridge); the Swallow and Ariell Steam Biscuit factory was jumping and architect J.J. Clark was putting the finishing touches on the Port Melbourne courthouse, cop shop and lock-up. That latter building of beautiful bluestone and sandstone bones has long quit being a drunk tank for wild seamen, instead housing some of Port Melbourne's prettiest eat and drinkeries. Most recently it was Spanish restaurant Corte. And now, after a hefty $1.5 million refit by Atelier Wagner Architects, it's become the luxe new home for Ciao Cielo, which has shifted from just up the road.

It's hard not to be caught up by this space, inside and out. Walking in off a fairly industro-residential patch of Bay Street, it's a fairy-lit oasis of gravel, palms and patio furniture. In summer this has long been one of Port Melbourne's best places to get salubrious, even when they were serving simple sangria in tumblers as the City Tiler. That's been upgraded to spritzes. Better still, there's now a marquee where the more casual Ciao Cucina serves pizzas and Tellurian shiraz through the winter months.

But today we're here for Ciao Cielo, where you're sat on bentwoods or puffy blue banquettes getting atmospheric warmth from the open fire, inspiring church-y vibes from the mottled soaring ceilings, and a more modern kick from a freshly tiled bar and hanging steel wine racks.

Owners Kate Dickins and chef Bryan Nelson have high aspirations for their move up Bay Street, evidenced by Nelson's contempo tweaks to regional dishes.

In the snack corner, two versions of suppli (Rome's answer to Sicily's big old fried risotto balls, arancini), are full-flavoured spheres with a generous wodge of mozzarella at their hearts. The spiced duck version wins out for its high flesh-to-rice ratio, cut by parsley and citrusy orange aioli, but the eggplant version, with plenty of tomato acid tang, would equally make you give the sometimes dull dish a chance.

Bresaola with gnocco fritto reads like that Emilia Romagna hero (hot, fried dough pillows that you drape with salumi, half melting the tasty fats) but instead the air-dried beef is dressed with leaves, horseradish cream, sweet pickled onions and the tiny pillows act more like croutons. It's a nice composition, potentially improved were our gnocco hot.

It's often dishes riding closer to tradition that would bring you back. I'd stick a fork in the crab spaghetti again, all tomato sweetness and chilli heat, before the potato gnocchi that is excellently cloud-like, but wildly matched with a parsnip cream and pieces of pickled pear that have soaked up a strong load of their vinegary liquor.

You wouldn't be foolish, in fact, to skip straight to the big gun meat section. It's worth a visit just for the bubbling cauldron of goat, braised Sicilian-style, the meat bringing a perfect amount of musk to a stew with high-low accents of wild olives, sweet fennel and tomato, soaking cheesy soft polenta dumplings.

There's a huge one-kilogram bistecca fiorentina, with a proper cut from the Chianina cow. Ours doesn't have the smoky signature of being cooked over coals, but it's a flavoursome steak regardless with all the mustardy trim and some nice sides like bitter green cime de rapa tossed with garlic and anchovies.

Dickins and Nelson are pitching all this as Italian fine dining and while the napkins are linen and banquettes plush, they're a few stitches shy of thousand thread count dining.

Service is friendly, but when we ask our young waiter about the daily mix of interesting mozzarellas (as the menu suggests), he's not even sure if they're imported or local. Wine-wise, you can drink a great barolo, and a few general tasting notes can be recited about by-the-glass options, but it's not exactly getting your glass primed at Grossi Florentino.

None of which is really an issue if you view this more as business-casual Italian in a room that happens to be an absolute cracker. Relax. Skip the over-produced banana creme brulee with thick toffee shell. And sink a spoon into table-served tiramisu – a family recipe that's aged as well the venue.