Southwark councillors have unanimously voted to introduce a late-night levy in the south London borough, despite vocal opposition from the hospitality industry.
The annual charge, which ranges from £229 to £1,365 dependent on rateable value, will apply to businesses selling alcohol between midnight and 6am.
Amendments were made to initial plans to give a 30% reduction to on-trade licence holders who are in receipt of small business rate relief and have a rateable value of £12,000 or less.
Exemptions will also be made for hotels selling drinks to their guests for consumption on the premises, as well as cinemas and theatres.
The levy is expected to come into force from the 1 September 2019, applying to 439 businesses and netting the London council more than £400,000 a year.
The funds raised will pay for the borough's night-time economy team of police and council workers, estimated to have a total cost of £335,500. The spending of any surplus revenue is to be determined by a board of police, council staff, operators and residents.
Councillors voted to approve the levy despite opposition from local businesses and UKHospitality, who presented a petition ahead of yesterday evening's meeting.
UKHospitality chief executive Kate Nicholls said: "Obviously, we are incredibly disappointed that Southwark Council has chosen to ignore the concerns of local businesses and residents. Pubs, bars and nightclubs that have helped drive the revitalisation of the area and foster a fantastic community spirit are now going to be penalised.
"By introducing a discredited tax, that the House of Lords recommended be abolished, Southwark Council has proven it only cares about revenue-raising, rather than supporting the local community. Local businesses, their employees and customers are the ones who will suffer."
A review of the levy will be held after the first year with the consideration of a further reduction category tied to a best practice scheme.
The introduction of a late-night levy is also being considered in Redbridge, east London.