The first thing to hit the table is a pot of giardiniera, the vegetables pickled in-house. Bread arrives, a crusty sourdough made on the premises by Roman-born couple Fabrizio and Consuela. Pasta and gnocchi are also house-made at Andrew Cibej's cosy new CBD osteria, as are the sausages and the daily-changing gelati and sorbetti.

This shouldn't be impressive. Isn't that what restaurants are meant to do – make food instead of buying it in? But increasingly, it's something to be celebrated.

Skilled staff are expensive staff, so more and more restaurants contract the work out to bakers, butchers and pasta-makers.

Cibej (pronounced Chee-bay, it's Friulian/Slovenian), who gave us the likes of lovely little Vini, Berta, and the game-changing wine bar 121 BC (recently sold), has just launched this buzzy all-day Italian in partnership with the operators of nearby China Lane.

Cibej himself is in the kitchen as exec chef, with MoVida Sydney alum Scott Williams as head chef, and Daniel Johnston (Alfio's) on pasta. 

For a bunch of blokes, they have an endearing habit of cooking like a kitchenful of nonnas. In fact, the gnocchi – as small as the nail on your little finger – with pistachio and pecorino, is credited to Nonna Cibej.

Even something strikingly contemporary, such as tender artichoke hearts whose long skinny stalks trail over a bed of lush, creamy curds of stracciatella cheese drizzled with fruity oil ($18) accompanied by a stack of perfectly crisp melba toast, seems somehow simple and earthy.

Spaghetti alla chitarra may be scattered with beach bananas and fingers of fresh sea urchin ($28), tossed in light stocky, oily juices, but it presses all those old spaghetti ai frutti di mare buttons.

Bacco, named for the god of wine and good times, follows the Italian tradition of having an espresso bar to the side, the cosy 30-seater dealing in pizza, panini and piccolos by day, soon to open at night for drinks.

It's linked only by the long galley kitchen to the separate wood-panelled osteria. The location defines the demographic, so a younger, table-hopping crowd in smart Boss suits and frocks is no surprise.

China Doll group sommelier Clint Hillery has done an Italian-and-friends wine list that suits the suits, with an especially intriguing 2014 Collector Rose Red ($68) from the Canberra district that's a rich, spicy mix of mainly sangiovese with a bit of canaiolo nero, mammolo and colorino thrown in.

Time, then, for the grilled and well-crusted hanger steak ($32), ruby-red and rested inside, austerely and gracefully served with an umami-rich anchovy and fermented radish butter and an entire grilled onion.

Order sausages ($26), and you get sausages – big berkshire porky-pig and fennel, rosemary-scented snags cut into hunks and sent out with warm lentils with a little red onion and parsley. Perfect.

There's fine in-house gelati and sorbetti, but where are the carbs in that? A classic frangipane tart of dense almond and pear ($12) has two no-longer-hungry people fighting over the last crumb.

It's a modest room lined with wooden panels – there's more interest out on the street – with engaging service and a good vibe. Best of all, it's a genuine attempt to return to how things used to be done – properly, in-house, and by hand.

The lowdown

Best bit: Everything is hands-on, hand-made.

Worst bit: Tables are too close for comfort.

Go-to dish: Artichokes with stracciatella, $18.

Terry Durack is chief restaurant critic for The Sydney Morning Herald and senior reviewer for the Good Food Guide. This rating is based on the Good Food Guide scoring system.