Blakehurst Marina has applied to renovate the bayside building, and spend $660,000 to turn it into a 120-seat restaurant and bar.
Marina owner and project developer Michael Kennedy said he has asked Kogarah Council to allow the restaurant to stay open until midnight seven days a week.
The council invited tenders for redevelopment of the heritage-listed pavilion in 2004, and called for public comment.
Residents said the building was an eyesore which should either be restored or demolished.
The proposal means the building is re-rendered and painted in colours appropriate to its 1933 vintage.
Internal walls and stairs would be removed to make way for dining space, as would run down men’s and women’s stairs to the change rooms on the lower floor.
The upper floor would be extended on each side to make room for an office, kiosk coolroom and dry store, as well as an outdoor dining area.