The building opposite also sustained considerable damage as the explosion could be heard across the southern Swedish city.
A fire broke out in the restaurant but was extinguished fairly swiftly. No one was reported hurt but furniture and the inside of the restaurant sustained considerable damage.
The area around the landmark Malmö nightspot remained sealed off a couple of hours after the explosion as police technicians searched for an explanation.
"There has been speculation that a bomb was placed on the handle of the restaurant door, but judging by the damage it could have been left anywhere outside the restaurant," Göran Billberg at Malmö police told news agency TT.
Police have concluded from the crime scene that the bomb attack was directed at Hipp but remain in the dark as to why.
"There are no known threats against the restaurant which can explain the incident," Marie Keismar at Malmö police to news agency TT.
The police have been in contact with a large number of witnesses who had heard the explosion but it is as yet unclear if anyone actually saw it.
The Hippodrome building, which today houses a restaurant, theatre and nightclub, was built in 1900. From the 1950s to the 1990s the Hippodrome housed a free church.