The newly-refurbished Warwick Arms pub in Clutton will stay open until 2am seven nights a week from next Saturday.
A compromise hatched at a Bath and North East Somerset Council licensing meeting means the pub can stay open until 2am, but not admit any new customers after midnight.
The expanding Mezze Restaurants chain also dropped the live music aspect of its application.
The pub has been renamed Mezze at The Warwick Arms after a £400,000 refurbishment.
The pub, on the A37 Wells to Bristol road, is the latest addition to the Bristol-based Mezze firm’s portfolio of hotels and Mediterranean-style restaurants in the west.
The refurbishment has created a new mezze-style restaurant, a la carte restaurant, eight-bed boutique hotel and cocktail bar.
There will also be a Mediterranean garden with an ice cream parlour, a heated al fresco dining area for up to 100 people, along with a wooden drawbridge leading to a new enclosed children's play area complete with pirate ship and castle, trampoline and picnic zone.
Mezze spokesman Alex Tryfonos the firm wanted to fit in with its community.