Sweet that’s lovely, though not new (3)
I believe the answer is:
ice
'sweet' is the definition.
(ice is a kind of sweet)
'lovely though not new' is the wordplay.
'lovely' becomes 'nice' (both can mean pleasant).
'though not' suggests deleting specific letters.
'new' becomes 'n' (common abbreviation eg NT for New Testament).
'nice' with 'n' taken away is 'ICE'.
'that's' is the link.
(Other definitions for ice that I've seen before include "Cubes in a drink" , "engine" , "Diamonds (slang)" , "Precious stones" , "Winter formation" .)