The venue, named Washed Out, will officially launch on Friday on level two of The Grand Hotel on Keira Street.

The small upstairs room of the sprawling nightclub-pub, formerly and briefly known as Barcode, has been transformed with huge murals from artist Jack Irvin of cult Cronulla gallery venue Space 44, a bar, and a large stage.

"It is about adding another venue to Wollongong for people to see music," said Washed Out manager James Sherley.

"A lot of bars are dabbling in live music, but we wanted to start a dedicated music venue."

Washed Out will join Rad Bar, the former Yours and Owls space, as the only dedicated live music spaces in the CBD.

Mr Sherley said initial plans were for occasional concerts with local and touring bands, and future plans would depend on community feedback.

"We'll just gauge how people respond, and if it goes well, we'll do as much music as we can," he said.

The Grand is owned by the Wollongong Nightlife group. Washed Out's launch party on Friday will feature performances from touring acts Lunatics On Pogosticks and Sea Legs, as well as local bands Sheerkhan and The Vanns.

Mr Sherley said the venue would also exhibit local artists, and would produce a limited edition range of exclusive T-shirts each month created by Illawarra designers.

"It's about anything creative," Mr Sherley said.

Lu Ristov, of Wollongong Nightlife, said Washed Out was a left-field venture from the normally nightclub-focused business.

"It's been an ongoing theme that people are looking for more live music venues, and we've been listening," Mr Ristov said.