Provisions is known as a Cromwell shop, which has been selling home-made preserves and baking for more than six years.
The Arrowtown cafe will sell similar fare.
Jane Shaw, who has opened the cafe with fellow cook and co-owner Pauline Murphy, said the fresh baking would be the main drawcard.
"Over the past years we have been selling freshly baked sticky buns with great success at the farmers market in Cromwell every Sunday during summer."
They would be part of the daily menu at the Arrowtown cafe, Ms Shaw said.
A full range of breads, cakes and sandwiches will be served fresh every day.
As a special breakfast treat, she recommended the fruit bread made as French toast with cherry-vanilla butter, or the home-made bagels with local cheese and smoked salmon.
The full range of Provisions products, made from local produce at the commercial kitchen at the Cromwell shop, is also available.
The range includes sauces, jams, chutneys, jellies, fruit vinegars, fruit paste and baked products such as shortbread.
Everything is made without added flavours, colourings or preservatives.
Best-selling products are the chutneys, including the roasted nectarine chutney and the roasted cherry chutney, which won the "Artisan Award" in Cuisine magazine last year.
On opening day, the cafe was buzzing with people who were heard discussing the ingredients in the cakes and breads with great interest, and the four employees were kept busy restocking and serving customers.
Roman's Cottage, which houses the cafe, is actually two of the original miners' cottages, which were bought by the Queenstown Lakes District Council in 2007 to preserve the township's heritage through the well-known little dwellings along the main tree-lined street.
Many of the customers on the first day were locals eager to see the restored cottage.
"It has been amazing how many people have come and thanked me for opening a cafe here.
The residents in Arrowtown really care about the town's heritage," Ms Shaw said.
"Over the past weeks, people have been pressing their noses against the windows to catch a glimpse of the interior. On opening day, several people stopped by and said they had once lived here."
She said the historic cottage was a perfect home for her business.
"Our products are made in the old-fashioned way from old recipes, but with a modern twist. It fits so well with this cottage, which also has a lot of history, but has been brought up to a modern standard," Ms Shaw said.
The cafe is open from 9am to about 5pm every day of the week, and is available for evening functions until 10pm.
The owners are considering longer opening hours for summer.
