Six people from six households will be able to meet outdoors in Wales from Saturday.
The easing of the lockdown rules also mean that from next week pubs, restaurants and cafes will be able to re-open to serve customers al-fresco.
First Minister Mark Drakeford said the move was guided by the fact there is lower risk of catching Covid outdoors.
It comes after the Welsh government announced gyms could reopen earlier than previously planned.
Currently, up to six people from a maximum of two households are allowed to meet outdoors, although children under the age of 11 or carers do not count in the total.
The new rule means any six people can meet outdoors, with children under 11 and carers exempt from the rule.
It brings Wales roughly in line with England and Scotland, although England does not allow an exemption for children.
Mr Drakeford said: "Because meeting outdoors continues to be lower risk than meeting indoors, we are able to bring forward changes to allow any six people to meet outdoors.
"This will provide more opportunities for people, especially young people, to meet outdoors with their friends. This will undoubtedly have a significant positive impact on people's well-being."
Pub rules 'still vague'
Kelly Jolliffe, landlady of the Greyhound Inn and Hotel in Usk, said she was "very excited" to re-open, adding she can seat 160 people in her beer garden.
Speaking to BBC Radio Wales Breakfast, Ms Jolliffe said: "We don't make masses of profit, but it's about getting people back in here.
"Getting the team kind of match fit, if you like, ready to be able to open indoors as well, because it takes probably four to six weeks to get us all back up and running properly."
She said the phone had been "ringing off the hook" with customers wanting to make bookings.
"People have just been so supportive and also they're being flexible. What's fabulous is they're phoning and saying, 'Whenever you can fit us in. We know you're going to be busy, so it doesn't have to be a certain time, doesn't have to be a certain table, just fit us in when it suits you'."
'Do we still track and trace?'
David Morgan, landlord of the Cross Inn in Maesteg, said that while the new rules were a positive move, but he still had concerns.
He said: "Everything's still vague. We know six people can meet outside -- we found that on Wales Online this morning and the pubs are definitely opening.
"What about the other regulations? Do we still do track and trace? We know nothing and we won't find out anything until Thursday.
"I've been phoning my main suppliers and the rep there, she's been giving me all of the information. There's other independent brewers I've been picking stuff up off. We've had very little from the government and the council.
"We're apprehensive. It all depends on if people come out, when they come out, how they're going to react to coming out because they've been taught how to drink in the house with cheap booze."
What has the political reaction been?
Earlier this month, Mr Drakeford announced gyms would reopen earlier than planned - on 3 May instead of 10 May.
Welsh Conservative Senedd leader Andrew RT Davies said the move should have happened "weeks ago and would've happened in the Welsh Conservative roadmap out of lockdown".
"Labour's insistence on playing politics, rather than following the science, has tragically left Wales with the longest lockdown, worst economic impact and highest death rate in the UK," he said.
Welsh Liberal Democrat leader Jane Dodds said: "This is obviously good news for the hospitality sector which has been so hard hit by Covid, especially during this current lockdown.
"I want the Welsh government to ensure that financial support remains for those bars and restaurants who do not have outdoor seating and am calling for support to be given to those businesses who are only able to partially open."
Plaid Cymru's Rhun ap Iorwerth added: "This confirmation will be welcome news for some businesses, but many rely on indoor hospitality for their financial viability.
"With favourable prevailing conditions, indoor hospitality should be allowed to reopen on May 17th to put the spring back in the step of Welsh business."
Welsh Labour said it had nothing to add to the Welsh government statement.
What is the state of the pandemic in Wales?
Wales' Covid case rate has been the lowest of the UK nations since 26 January. It currently stands at 15.9 cases per 100,000.
Only 1.7% of Covid tests now result in a positive result - the lowest in Wales since 3 September.
The number of "active" Covid patients in hospital on Sunday, 105, is also the lowest since the pandemic began, while numbers in critical care with Covid are in single figures for the first time since early September.
Wales is also ahead of the other UK nations in the proportion of people given first and second doses of a Covid vaccine.
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