It was yesterday confirmed the council had withdrawn its "notice to fix", which was issued on March 19 and required the building to close or face a $200,000 fine.
The notice had been issued after the Fire Service inspected the building and condemned it as a potential deathtrap, having found inadequate fire alarm and emergency lighting systems, blocked fire exits and staff who lacked knowledge of evacuation plans.
Yesterday, council chief building control officer Neil McLeod said he was satisfied the managers of Sammy's had taken steps to rectify the problems, and the building was safe for use by crowds of up to 250 people.
"The issue was as much a matter of how the building was managed as it was the structure of the building itself.
"We are satisfied the building will be safe to those numbers," he said.
Sammy's managing director Sam Carroll yesterday said the exits had been cleared, lighting and evacuation plans upgraded, and staff given additional training in what to do in an emergency.
The measures had been approved by the Fire Service, which had advised the council it was satisfied, he said.
Mr Carroll, who also runs the Big Ups inflatable games business from the venue, said he was "stoked" to be reopening.
"I feel like I've given a great deal of myself to Dunedin entertainment over the last two years.
"I'm stoked on that note and I'm stoked we are still here."
Big Ups resumed operations yesterday and it was hoped several small live-music events, with crowds limited to 250 people, would be staged at Sammy's in coming weeks, he said.
It was hoped larger crowds, up to 700 people, would be allowed once work to install automatic heat and smoke detectors, costing $40,000, was completed.
The work was expected to be completed early next month.
It was hoped approval to lift the maximum crowd size would come in time to host New Zealand band the Phoenix Foundation on May 7, which was expected to attract a crowd of about 500 people.
Mr Carroll said he was negotiating with building owner Sam Chin - who shared ownership with his family - about paying for the new detection systems.
The cost of the new system was expected to be met by the Chin family initially, and Mr Carroll's business was to pay back the investment through increased rent payments, Mr Carroll said.
