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The Michelin-starred restaurant will open in the former Bocadillos space by January 2018 with its same staff, same concept and a brand-new lunch service. Nico's Sacramento Street space will close Aug. 26.

"We've spent probably the last year or so mulling over the move. We just love that Jackson Square neighborhood," says Andrea Delaroque, who co-owns the restaurant with her husband, Nicolas.

Opportunities to fill other locations in Jackson Square popped up for the husband-and-wife duo over the last year, but none seemed to be a fit. And while the Presidio Heights crowd supported the bistro's dinner service over the years, Andrea and Nicolas felt the neighborhood couldn't sustain a lunch service, a component they wanted to implement in the near future.

"With the realities of doing business as a restaurant in San Francisco, and to maintain the integrity of what we do and maintain the staff we have, we have to alter our business model, and that requires lunch service," she said. "Nico is just philosophically against raising the prices really high."

Lunch at the new Nico will be a three-course affair along with an a la carte option. Andrea joked that the staff "doesn't want to keep people hostage for hours on end" in the middle of the day for Nico's five-course evening tasting menu (which runs $60-$70).

Balancing price points and service options is essentially a numbers game, one that Bocadillos co-owner Gerald Hirigoyen realized his restaurant was losing. Bocadillos had a compact list of California-inspired versions of Spanish and Basque small plates where nothing cost more than $20. Hirigoyen the low price points were untenable in today's restaurant environment.

In terms of square footage, Bocadillos space is smaller than what Andrea and Nicolas are used to on Sacramento Street (in fact, it's roughly half the size of Nico), but the idea of a more intimate kitchen and dining room appealed to the couple.

"The space also has a cool history. It was the original Black Cat Cafe, one of the first gay bars in San Francisco. And the winemaker we use a lot, it turns out her grandfather was the original owner. So many things just pulled us toward this space," Andrea said.

As for why Nico is closing in August, five months before its planned debut in Jackson Square, Andrea said the restaurant's crew needed a break. The vacation is actually going to cost Nico its Michelin star since the guidebook will be published while the the restaurant is closed. But for Andrea, that doesn't matter. She and her husband are going to travel through Europe, primarily France and England, where he'll stage at various restaurants.

"Our team works so hard. It's an opportunity to give them some time to take a minute and recharge," she said. "The remodel starts in October, and then we'll hit the ground running."

Nico: Opens at 710 Montgomery St. (at Washington) in January 2018; final service will be Aug. 26 at 3228 Sacramento St.

Justin Phillips is a San Francisco Chronicle staff writer. Email: jphillips@sfchronicle.com Twitter:@JustMrPhillips