Hot on the heels of its launch last month of a pop-up at Balmain's Exchange Hotel, Love Tilly Group has even loftier plans in the Sydney CBD. Next month it'll open Palazzo Salato, a 120-seater inspired by New York City's Gramercy Tavern and Roman trattorias including Roscioli and Marzapane.

Sliding into the former home of Redoak Boutique Beer Cafe at 201 Clarence Street, Palazzo Salato lands in a part of the city which last year added grand city diner, The Charles. It also joins a boom in new city restaurants, with Brasserie 1930, Clam Bar and Le Foote just a few of incoming arrivals.

Palazzo Salato is a big step up for Love Tilly Group, which has previously specialised in more diminutive venues, from its namesake Darlinghurst bar to Ragazzi and CBD shop, Fabbrica.

"I realised this was the site for our first proper restaurant the moment we walked into the space," group executive chef Scott McComas-Williams says.

"For the first time, we have a kitchen with enough room to swing a cat, allowing us to produce some of my favourite hand-shaped pastas like agnolotti del plin, scarpinocc and fagottini while still being able to grill, roast and braise cuts of meat, veg and fish."

The venue promises a 500-bottle wine list and a walk-in bar serving carbonara, cacio e pepe and alla gricia alongside classic drinks.

Palazzo Salato will include a Louis Wayling mural behind the bar, interior design from Studio Vista's Sarah Watt and graphics by SCCO Studio's Jarmaine Stojanovic.

Palazzo Salato will open at 201 Clarence Street next month. A large bar and outdoor dining space are set to open underneath, with a Kent Street entrance, in late 2023.