A popular Sydney bar and live music venue has been hit with a "strike" and will have to pay tens of thousands of dollars in extra license fees after police caught four 17-year-old girls drinking alcohol there last year.

As reported by Fairfax, the Hotel Steyne in Manly was also handed a $5700 fine in District Court yesterday for allowing the minors in the venue and serving them alcohol.

Venue co-owner Arthur Laundy said of the decision, "I'm so shattered, I'm so disappointed.

"You try hard and one blemish in eight years and this is the result."

The "strike" handed down is the venue's first in the three-strikes law where bars can lose their license altogether if they receive three warnings. 

Under the law, the northern-Sydney venue must now pay a "compliance risk loading" fine of $3000 a year and a "patron capacity loading" of $8000 a year during the three-year strike period.

The ruling comes just days before the state government is expected to respond to a review of the three-strike law, after the NSW branch of the Australian Hotels Association called for strikes to be placed on a licensee, rather then the venue itself.

A number of burgeoning Aussie acts have performed at the Hotel Steyne in recent months, including Alex Lahey, Dorsal Fins, Lime Cordiale, The Laurels and more.

Rolling Blackouts Coastal Fever and Slumberhaze are also set to perform there this Thursday.