The pedestrian-friendly zones are planned around the proposed George Street light rail route and would be phased in over the next three years, pending state government approval.

The City of Sydney's transport committee unanimously endorsed the plan on Monday night. It is likely to gain the backing of next week's full council meeting before going to Roads and Maritime Services for approval.

A spokeswoman for RMS said it would assess the council's application for each laneway case by case, but indicated in-principle support.

The council has already spent millions converting Barrack Street, Ash Street and Angel Place to shared zones, and three laneways in Chinatown. Concept plans are complete for six other laneways including Lees Court off Rowe Street, itself once famous for theatres, small shops, art studios and cafes before being mostly demolished for the MLC Centre in the 1970s.

But conversion of the remaining 45 lanes requires RMS approval and also depends on the state government proceeding with light rail along George Street.

Martin O'Sullivan is the owner of the Grasshopper Bar in Temperance Lane, which is earmarked for conversion. He said pedestrianising laneways was ''a good thing for the city'', so long as access for delivery and service trucks was managed well.

Fi Thepfun, bar supervisor at the Vault Hotel on Rowe Street, said customers and management both benefited from laneway closure. ''Having the laneway with no cars coming through is good for business and our patrons, and good from an RSA [responsible service of alcohol] perspective as well,'' Ms Thepfun said. ''It'd be nice if we had more of these in the city.''

But the president of the NRMA, Wendy Machin, sounded a cautious note: "Sydney is owned by all the people of NSW and in fact Australia. Decisions made on how traffic moves in and around the CBD should not be undertaken only by Sydney City Council but should involve all levels of government and key stakeholders.''