With his Jazz City Diner near capacity most nights, dispensing burgers, gumbo and chicken and waffles to American food enthusiasts, chef Dan McGuirt has decided to branch out and open a new outpost just around the corner from his original diner.

Sandwiched snugly in the Republic 2 Courtyard – and counting restaurants Universal, Phamish and Lucio Pizzeria as its neighbours – Jazz City Milk Bar aims to be a chilled out dessert spot. But given its fancy neighbours, come dinnertime they'll offer some upscale American fare like oatmeal risotto with mushrooms and truffles as well.

Inside, the milk bar features checkerboard floors, art deco lights and a clutch of retro signs. There are stools at the counter and tables out in the courtyard for larger groups. Once seated, it's time for a milkshake. Flavours include coconut, mango, strawberry, raspberry and passionfruit, as well everyone's new favourite – peanut butter.

Food-wise, peanut butter and jelly cookies are a good starting point for a snack, but then it's time to get serious. Pies come in buttermilk, coconut cream, apple and strawberry varieties. A classic banana split is also on the menu, as is grape-flavoured cotton candy. To complete your sugar rush, there's Bazooka Joe bubble gum and Tootsie Rolls to stuff into your pockets for later.

The savoury side of the menu includes an impressive array of hot dogs. Try a Texas Chilli Dog, a State Fair Corn Dog or a New Orleans Fried Oysters Remoulade Dog. New Orleans BBQ Shrimp is a must try, while Cajun Meatloaf and a host of other Southern favourites are set to be given a whirl on the menu in the future.

Jazz City Milk Bar will start offering a breakfast service this weekend. Expect classic American wake-up fare such as omelettes, waffles, pancakes, grits and biscuits.

Now is not the time to be dieting in Darlinghurst.

Jazz City Milk Bar
Republic 2 Courtyard, Palmer Street, Darlinghurst
(02) 8354 1776

Daily 11.30am–2.30pm, 6pm–10pm