In a unanimous vote Wednesday, Town Council members gave final approval to the change after months of deliberation.
According to South Carolina law, restaurants and bars must stop pouring liquor at 2 a.m. but can continue serving beer and wine.
Jurisdictions can set earlier cut-off times for alcohol sales through local law.
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Port Royal previously prohibited the sale of beer or wine between 4 and 6 a.m.
Town officials began looking into alcohol sales cut off times in February after the police department said it thought an earlier last call could help quell a rise in late-night incidents at Cowboys and Indians, a bar and restaurant on Ribaut Road.
"Our policemen are loaded between the hours of 12 a.m. and 4 a.m.," Councilman Vernon DeLoach said after Wednesday's meeting. "This is purely a safety measure."
At past meetings, council members discussed the possibility of requiring bars and restaurants to stop serving all types of alcohol at 2 a.m. but allowing them to remain to open sell food and non-alcoholic drinks. However police officials warned that type of system would be difficult to enforce.
The new ordinance is effective immediately.