Belgrave, on Merrion Place in the city centre, will play music to punters on an adjacent side street from 12noon until 10am between Friday, April 29 and Mayday.
A senior environmental health officer had tried to block the set from taking place, on the grounds people living in neighbouring flats could be disturbed.
But councillors have allowed the event to take place after Belgrave bosses promised to meet certain conditions and to install sound limiters on the set to reduce the volume.
Identical applications for an outdoor music set at the venue across the June and August bank holidays this year have also been approved.
At a hearing on Tuesday, where the matter was decided, Belgrave’s operations manager, Stevie Mulgrave, said: “The reason behind putting the entertainment outside is that Covid has changed the way we operate and we still have knock on effects from that.
“As a business we’ve struggled to attract the same DJs and international acts to play indoors again.
“It’s one of their stipulations unfortunately, that they want to play outside.
“As a venue we’ve been very supportive of the Leeds 2023 cultural bid.
“I believe we’ll be able to bring a lot to the city on that. But to do that we need the support of the council to put on events like this.”
Mr Mulgrave promised the entertainment would move indoors at 10pm each day, and that the capacity would be limited to 150 people.
He added: “We want to work with the neighbours. We want to co-exist with them.”
But Vanessa Holroyd, from the council’s environmental health team cited two separate noise complaints made against the venue last year, from nearby Symons House.
She said one of the grievances had been lodged by a resident who claimed noise could still be heard with their window shut, while the other was made to the council’s out-of-hours service past midnight.
Ms Holroyd told councillors: “My concerns are that you’ve got four consecutive days of DJs playing live music for 10 hours
“I just think for the block of flats at Symons House to be subjected to 10 hours of that for four consecutive days is quite unreasonable.
“I appreciate the reason why Belgrave want to play the music outdoors.
“I just don’t think that’s reasonable for those residents.”
After deliberating for around 40 minutes, a panel of three local councillors unanimously decided to grant the application.
In their reasoning, they said it was within Belgrave’s interests to avoid attracting complaints, so as to not affect their chances of gaining a licence for future events.
Among other conditions agreed, the venue agreed to offer a contact number to the management company at Symons House.