Londoners will be allowed to meet outdoors in groups of six from 2 December, the government has announced.
The city will move to tier two lockdown restrictions when the England-wide lockdown ends at midnight on Tuesday.
Households mixing indoors is still banned, but pubs can open again if they serve substantial meals.
Mayor Sadiq Khan said "it is the right decision for London to have been placed in tier two" as the infection rate was falling in most boroughs.
"Londoners have done exactly what has been asked of them since the start of this pandemic," Mr Khan said.
"There must be no complacency - we know how quickly this virus can spread."
Hairdressers and other forms of "personal care" can also reopen from 00:01 GMT on 2 December.
Limited numbers of spectators will be allowed at sports events and live music.
Conservative MP for Harrow East Bob Blackman said he was "pleased" to see London placed in tier two.
He was one of several MPs who had called for London to be split into more localised regions with different lockdown restrictions.
He said he was "disappointed that London has not been looked at by a borough by borough basis".
But moving London into tier two restrictions "will allow the hospitality industry in the capital to begin to rebuild after a difficult time", he added.
Labour MP for Hampstead and Kilburn Tulip Siddiq said a "prolonged tier two will be extremely challenging for many.
Ms Siddiq, who represents the area with London's lowest Covid infection-rates, said: "Businesses in my constituency will be glad London isn't facing the toughest restrictions.
"Our city needs a clear route map out of these restrictions, which will require leadership from our government to fix problems with the test and trace system."
The Society of London Theatre (Solt) said the announcement was a "relief" for the capital's theatres and the West End.
Under tier two restrictions theatres and venues can open in with social distancing and under new Covid-secure guidelines.