Also, restaurant dining has been extended until 10 p.m. (1400 GMT) from 6 p.m. and group gatherings have been expanded to four people, from two previously. Many schools have also resumed in-person learning after months of online classes.
The easing comes as the number of daily Covid-19 infections in the global financial hub dropped below 1,000 for the past six days from a peak of more than 70,000 on March 3.
While many residents are relieved at the relaxation of rules, scores of businesses have already shuttered and tens of thousands of people have fled the city as authorities re-imposed measures in January that were first implemented in 2020.
Hong Kong has grappled to impose a "dynamic zero" Covid policy similar to mainland China, which aims to quash all outbreaks versus living with the virus as many countries are doing.
Hong Kong's borders have been effectively sealed since 2020 with few flights able to land and hardly any passengers allowed to transit, isolating a city that had built a reputation as a global hub.
Swimming pools and beaches remain shut, frustrating many athletes and residents. Bars, nightclubs and saunas are also still closed, with many unable to stay afloat and others on borrowed time.
While Hong Kong managed to keep the coronavirus at bay for much of 2021, a surge of the highly contagious Omicron variant brought the former British colony to its knees in February, swamping its world-class medical system as cases ripped through the densely packed city.
Hong Kong has recorded more than 1.1 million infections and 8,963 deaths.