Caveau has won its ninth consecutive hat award in the Good Food Guide 2014 - the only Wollongong restaurant to be recognised at such a high level.
The Wharf Rd Restaurant & Bar in Nowra also won a hat, while Biota Dining in Bowral was awarded two hats, one of only three regional restaurants in NSW to do so.
In Wollongong, two other restaurants scored well with a ranking of 14 - Thirroul's Flanagans Restaurant and Ruby's at Mount Kembla, although not high enough to be handed a hat.
To be honoured with a hat, restaurants must rate 15 and above out of 20.
Caveau's chef Peter Sheppard and his wife Nicola, who manages front of house, said the award was a huge achievement.
"We've been here nine years so we're fairly comfortable," Ms Sheppard said. "We've seen a lot of restaurants come and go in that time. We're grateful that we have our loyal customers who keep coming back."
The Keira St restaurant has won a hat every year since opening its doors in 2004, always striving to stay one step ahead.
"It's hard to keep up with what's happening. The pool is improving so just to maintain a position requires a huge stream of input," Mr Sheppard said. "But I think we've improved out of sight in the past two to five years. We eat out a lot. Not to do what other people are doing but to know what we like and what we don't like. Then all you can do is hope that other people agree with you."
Mr Sheppard changes his menu every three weeks.
"The food is the biggest single part, but the orchestra of the rest of it, from the moment a customer books to the time they walk out the door, is just as important," he said. "The quality of the raw ingredients is also important. I have a network of small organic growers that grow exclusive for us, so come spring the menu is dictated by what they are growing. We tell them we're after turnips the size of marbles and six weeks later they're pulling them out at the size of marbles."
A critic at the Good Food Guide said Caveau's every dish was a delight, "from the opening shot of tomato and basil consomme to the very last lick of salted caramel in the chocolate millefeuille".
Mr Sheppard said it was difficult to maintain such a high standard in regional NSW and while some restaurants would do well one year, many others didn't last the distance and were forced to shut down.
"Wollongong's mindset is that if you want something special you have to go to Sydney," he said. "It's true we don't have the Opera House or the Bridge so we have to work quite hard at what want to achieve here."
In Wollongong, six other cafes and restaurants received a mention in the Sydney Morning Herald's Good Food Guide 2014, including the Nan Tien Temple's Dew Drop Inn Tea House, with its steamed dumplings and noodle soups made right in front of the customer.
Dew Drop's catering manager Julie Cartwright said she was grateful the tea house had been recognised in the statewide awards.
"The philosophy behind the cafe is definitely East meets West," she said. "It's a place where anyone can come and sit in a tranquil environment and enjoy fresh food prepared in the Buddhist way."