The Tap owner Alan Hamilton, of Arrowtown, stands outside the historic bar and restaurant. Photo by Tracey Roxburgh.

The owners of a 136-year-old building in Arrowtown hope to breathe new life into one of the town's favourite watering holes, described as "a real hodgepodge" and "a right mess" by its owners.

A resource consent application was lodged last week for The Tap bar and restaurant, on the corner of Buckingham and Wiltshire Sts, opposite the Arrowtown Library.

The owners, Alan and Barbara Hamilton, have spent 18 months planning about $1 million of work which would bring the historic building and adjoining garden bar into line with the rest of the town's main street.

The 1874 building was originally a bank and had been a commercial site for most of its life, although never formally designated as such.

Mr Hamilton said he and his wife had a love for "old cottages", having restored their own historic home on Anglesea St and previously restored the Geraldine Post Office.

After buying The Tap 18 months ago, the couple decided to restore the building and enlisted the services of architect Michael Wyatt and landscape architect Philip Blakely, simultaneously consulting anyone they thought might have an interest in the plans.

Their plan is to lift the back section of The Tap, which houses the restaurant's kitchen and bathroom facilities, and create a new kitchen and public amenities on the same level as the historic building.

The work would also see additional outdoor dining space created along the Wiltshire St frontage.

Mr Hamilton said they also planned to subdivide the garden bar area, undertake an extensive landscaping job and erect a small cottage on the second site, aimed at "soft commercial".

The landscaping work would also create a public walkway from Wiltshire St to the Buckingham St Cottages, which were nearing completion, he said.

"What the council really want is ... a public walkway from Wiltshire St to link with the nice work the Cottages Trust is doing.

"If we give them access down that walkway [we could] put a little cottage on what is currently the garden bar.

"It's all overgrown there. The area is a right mess.

"In some ways, we are taking it away [the garden bar], but it's a major beautification project.

"It's a major tidy-up.

"There's no footpath or anything down there now. It will create more sensible car parking and [we'll plant] attractive trees.

"We have to do commercial to justify doing anything."

Mr Hamilton said the couple had received general support from everyone they had consulted, including the New Zealand Historic Places Trust, which gave the proposal "a clean bill of health" and the Arrowtown Advisory Planning Committee, which had been "most supportive".

"Locals really love it because they want the area tidied up."