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Uruguay's proposed new law that, come next April, will allow citizens to buy marijuana at pharmacies and grow up to six pot plants at home won't do much to chill out tourists: Visitors will still be prohibited from smoking up in the country Homer Simpson once titteringly called You Are Gay (and whose official name, for future Jeopardy! reference, is the Oriental Republic of Uruguay). But as you wander down the placid Calle de los Suspiros, or Street of Sighs, in the historic quarter of Colonia del Sacramento, you hardly need pharmaceuticals to help you wind down.

This quiet little wisp of a town, an hour's ferry ride from high-energy Buenos Aires, is a time capsule of calm, complete with vine-draped walls, cafés, art galleries and the occasional vintage automobile that doubles as a flower planter.

Sloping away from the leafy, central Plaza Mayor, the Street of Sighs got its name, depending on whom you ask, from the prostitutes that used to work this once-bustling port or from the prisoners housed here by Portugal and Spain in the days when those European heavyweights fought, often bloodily, for control of this southwestern corner of Uruguay.

Seemingly frozen in time, houses clad in either jagged rock or pink-washed stucco flank the block-long cobblestone street – the flat-roofed ones Spanish; the angled ones, Portuguese.

Here you'll find a couple of literal hole-in-the-wall restaurants: the Buen Suspiro, with tables in both a fanciful little cellar and a simpatico courtyard; and, across the way, the even tinier, even more unassuming El Cofre.

Either provides an ideal perch at which to sip a yerba mate – the caffeine-heavy, tea-like drink favoured by both Argentines and Uruguayans – and put the bustle of Buenos Aires firmly in the past.

Besides, you're hardly at a loss for a whole lot of past right here in Colonia: The story of the town's Barrio Historico (Historic Quarter) spans 333 years, five countries, countless imperial battles, and earned the title of UNESCO World Heritage Site. You can contemplate that convulsive history from a lookout atop the whitewashed Faro lighthouse.

Looming over the Street of Sighs, it's nestled in the tumbling ruins of a 17th-century convent, and affords views north toward Brazil and south to Argentina (Buenos Aires is visible on a clear day).

At the Barrio's heart is the tree-packed Plaza Mayor, which serves as both shaded respite from the summer sun (summer runs from now to March in Uruguay) and, with its stone steps and park benches, as chill-out central for travellers.

It's also home to a single-storey building of slatted rock, shaded by hot-pink bougainvillea, that houses the quaint Museo Portugues.

Inside, several testaments to the town's Portuguese history are laid out with unpolished charm: crispy old maps; a smattering of jewellery; even the royal medallion that hung on Colonia's city wall when Spain was at bay. Your ticket (roughly $3) also gets you into the square's Museo Municipal and several other dinky but genial historic venues on nearby streets.

If it's a nice day, though, and it generally is this time of year, you'll want to spend it outside. One option is to follow the Street of Sighs away from the Plaza and down to the Rio de la Plata.

At the water, turn left and you'll soon come to the imposing city gate, or Porton de Campo. Dating from 1745, its ramparts now afford waterside views that come close to rivalling those of the lighthouse, plus a funky drawbridge and long-disused moat.

Back down at street level, turn right from the gate, and you begin a riverside circumnavigation of the quarter along a gracious, if somewhat tattered, promenade.

All along the shore, stretches of sand draw picnicking families; rocks provide natural perches for fisherman and canoodling couples; and restaurants serve up sunset views.

As you curve your way first west, then north, you'll soon come to the Calle de la Playa, an ambling street that invites you back into the heart of the Barrio, where laneways heave with the roots of towering sycamores, and local families sit, as if on official display, in living rooms whose windows open to the sidewalk.

At the corner of Calle Real, consider stopping for takeaway at chocolatier Choo, whose swoop-legged central table, spherical chandeliers and mismatched mirrors would make Pee-wee Herman feel right at home.

A short block farther into the centre is Uruguay's oldest church – as old as Colonia itself. Its simple entrance is flanked by a pair of stout towers that culminate in wraparound lookouts; inside are a few centuries-old artworks, and a single, wide column that dates to 1731.

Next door, the Plaza de Armas park is crisscrossed with herringbone paths that hover over what remains of the original home of the town's founding governor, Manuel Lobo, a few of its walls still poking from the grass.

Across from those reminders of long-ago pillage and plunder sits a funky little restaurant that nods to the postmodern with kitschy paintings, vibrantly painted patio chairs and a Model-T Ford parked out front with flowers sprouting from its trunk.

We sidled up to one catch of the day (dorado, a whitefish popular in Uruguay) and one local dinnertime staple: chivito – a hot sandwich piled high with beef, bacon, eggs and veggies. Even unaided by the munchies, both were darn good.

Joined by a sleepy local mutt sprawled at our feet, we couldn't have felt more cocooned from this town's tumultuous history, in a country that may soon make history again, this time of a far more mellow variety.

If you go

Purchase ferry tickets from Buenos Aires (, although my travel agent got a slightly better price (about $200 return). Make time for customs at the Buenos Aires harbour; when returning, keep in mind that Uruguay is usually an hour ahead of Argentina. There's a bureau de change at the Colonia terminal, but rates are exorbitant; better to use Argentine pesos or American dollars.

Where to stay

There are several boutique hotels in Colonia. Rooms at La Mision, on Plaza Mayor, start at about $120, and looked sweet. ( I stayed just outside town at La Casa de los Limoneras, which has the vibe of a British country house, a sublime pool and enormous breakfasts, but is a $25 cab ride from town and has loquacious owners; rooms start at $140 in high season with breakfast; lunch or dinner is optional at $36 per person per meal (