The new owners of the Black Swan Inn, Michael Dawson and Chico Gomes, are seeking permission to carry out improvement works at the Union Street venue.
Mr Dawson, who also owns the Craster Arms and Saltwater Cafe in Beadnell, outlined his vision at a meeting of North Sunderland Parish Council.
"I believe the Black Swan is the oldest purpose-built pub in the village and it's enjoyed a healthy trade in its colourful past," he said.
"Its latest owners, the Chambers family, identified a need to move towards a food venue to complement the business and sustain trade. It did this very well, serving excellent food and beginning to build a good name.
"We intend to continue and build on that success. However, in an increasingly competitive market operators on the coast are striving to provide more stylish and contemporary surroundings and service, developing their offer to the ever more discerning customer.
"We intend to achieve this with a full redesign and refit of the whole ground floor, an extension of the bar to facilitate a bespoke cocktail menu, an extended kitchen fully fitted with new equipment and extraction with a higher level of noise and odour control."
Part of the plan is to extend into the existing open area/lean-to roofed courtyard space, enclosing the structure to provide year round seating. Efforts will also be made to maximise views across the harbour.
The scheme would result in the creation of four additional full-time jobs and up to six more seasonal positions
The nearby Schooner Inn has objected to the plan to move the main entrance of the Black Swan within 10m of its own, raising concerns about a possible increase in noise and potential disorder.
But Mr Dawson said: "I am aware of the concerns raised about the application. I want to make it clear that our intention is a move away from sports bar and late night drinking and towards a welcoming and attractive bar that regulars and tourists can enjoy a drink in together, and a family friendly food venue."
"The application is not for a new entrance to be built but, in fact, the use of an already existing door that has been there for many years. I still see the east side as being a significant entrance for all customers.
Mr Dawson, who inherited a license allowing the pub to stay open until 2am, added: "I want to make it quite clear again that customers will not be rolling out of the Black Swan at 1am and 2am. We will be closed. I would be more than happy to follow any instruction from the council to vary my license to midnight at the latest."
Parish councillors were unanimously in support of the application, which will now be determined by Northumberland County Council.
Coun David Donaldson said: "I think this is something the village needs. If it's along the same lines as what you have done in Beadnell then bring it on."