The block adjacent to the Great Western Hotel will soon be developed into a manufacturing, workshop and entertainment space.

A coffee cart, food trucks and taps of pre-batched craft cocktails will transform the square behind Smolle's auction mart into an alfresco-dining area.

The brewing, bottling and distributing of Mad Hatter's wines, cocktails and the soon-to-be Canobolas Brewing Co beer will happen through the week, with a tasting room on weekends.

The space will also be open to events and parties, with a rotating timetable of art classes and workshops on the way.

Ed Hattersley, whose family founded Belgravia at the Union Bank in 2007, will bring the outdoor-dining trend to Orange.

Mr Hattersley launched Mad Hatter Wine Co in 2016, after seeing how his family's vineyard had produced an excess of grapes.

Mad Hatter Wine Co now uses fruit from wine regions including Orange, Mudgee and Cowra, to make wines which are $20 a bottle or less.

Mr Hattersley said Mad Hatter's main aim was to make alcohol fun, easy and accessible to everyone.

He said the Peisley Street drink lab will be an extension of this business model.

"We produce every day drinking wines," he said.

"We're not trying to be a snobby place."

While the venue's development application and liquor license is yet to receive approval, the team is looking to start serving coffee from a shipping-container in February.

Using Sydney roaster, Pablo and Rusty's coffee, Mr Hattersley said the mobile cart will serve Orange's cheapest coffee.

With the focus on maintaining the industrial feel of the auction house put together by Frank Smolle in the 60s, pallet tables will accommodate outdoor diners, alongside apple bins and oil drums.

There will be a DJ on weekend evenings, with the opportunity to takeaway, return and refill growlers of booze.

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