Business partners Muhammed Saydur Rahman, who is Dawat's head chef, and his son and venue manager Juned Rahman have been awarded a share of the £600,000 Southside Business Grants scheme, to help carry out improvements.
The scheme, which closed to applications last month, was aimed to help businesses and landlords of commercial premises which were subject to a Compulsory Purchase Order within the former Summer Row area.
Grants have been used for either refurbishing existing businesses, helping them relocate, to purchase new equipment such as computers and new signage and diversifying their business.
The council has granted a three year lease to the Dawat, following the authority's complete refurbishment of the entire block. Leases are now also being negotiated on flexible terms which are designed to encourage more businesses to locate in the area.
Improvements to the Dawat include a new function room and open kitchen where the food is prepared. It is open from 5pm everyday with customers able to bring in their own alcohol.
Mr Juned Rahman said they were looking to expand the service, including opening at lunchtimes, which could create more jobs in the coming months.
He said: "We are delighted to have opened the Dawat Restaurant and are very grateful for the grant support we received from Wolverhampton City Council which enabled us to refurbish the premises.
"So far the response to the new restaurant has been extremely positive and we are looking forward to a successful future here."
Through the grant scheme, 13 businesses received grant funding to either refurbish their premises or relocate. A further eight grant applications are currently being processed.
A number of new shops have also opened in Southside - with the council-owned Cleveland Street parade fully let with five new businesses joining existing ones there.
Further work to let and acquire properties, carry out road improvements and tidy the area is on-going.
Councillor Peter Bilson, Wolverhampton City Council's Cabinet Member for Economic Regeneration and Prosperity, said: "I am delighted to see the progress that is being made in Southside.
"We made a commitment to invest and work hard to boost the area and support existing traders while encouraging new businesses to Southside. So it is excellent to see companies like the Dawat restaurant showing their commitment to the area.
"But while a lot of good work has already been done in Southside, we will continue to work hard to make the city centre a thriving and welcoming place for people to come to shop and visit in line with our City Centre Prospectus."
The Southside scheme is one part of the council's wider plans to regenerate Wolverhampton City Centre. The City Centre Prospectus was launched last summer which set out ambitious but achievable plans to attract new businesses to Wolverhampton.
The authority is also working closely with the owners of the Mander and Wulfrun shopping centres on plans to improve them and on potential investment in complementary facilities to attract shoppers and leisure users.
- released Tuesday 23 April, 2013