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Up to six people from different households will be able to meet indoors at pubs, cafes and restaurants in Wales from Monday.
First Minister Mark Drakeford has confirmed indoor hospitality can reopen from 17 May as Wales' Covid case rate continues to fall.
Extra cash support for hospitality businesses still affected by Covid restrictions has also been announced.
Mr Drakeford said the funding would "support firms and safeguard jobs".
The support is available to businesses such as pubs, clubs, restaurants and late-night entertainment venues.
They can claim up to £25,000 to help them through to the end of June as they prepare for re-opening and more normal trading conditions.
The news comes after there were calls from some in the hospitality industry for all significant restrictions on trading to be lifted before July .
Supply chain firms, events and conference venues not covered by the Welsh government's Cultural Recovery Fund (CRF) can also apply for support.
Mr Drakeford said the cash was part of a £200 million package earmarked for the incoming Welsh government to help businesses affected by the pandemic.
"We know the restrictions have helped to keep us all safe but they have had a big impact on Welsh businesses, which is why we are making more funding available to support firms and safeguard jobs," he said.
Welsh Labour, under Mr Drakeford, won last week's Senedd elections.
The Welsh Labour leader had faced criticism during the election campaign for not announcing the extra financial support for the hospitality sector. At the time, he said "election rules" prevented him from releasing the cash.
Hospitality businesses which can apply for this funding include: Pubs, clubs, restaurants, nightclubs, late night entertainment venues, supply chain firms, events and conference venues not covered by the Welsh government's Cultural Recovery Fund (CRF).
The government says an "eligibility checker" will open on the Business Wales website at midday on 17 May so businesses can find out how much support they are likely to be entitled to and how to apply.
Mr Drakeford added: "The public health situation continues to improve in Wales - we have the lowest coronavirus rates and the best vaccination rates in the UK".
Wales' route out of lockdown
The relaxation is the latest development in the Welsh government's route out of the lockdown imposed last year to contain the spread of coronavirus.
Gyms, swimming pools and community centres have already reopened while cinemas, theatres and museums are also due to reopen from 17 May, though with strict social-distancing rules still in place.
Covid rates across Wales fall
The news came as only six Welsh council areas reported deaths involving Covid-19 in the latest week of figures from the Office for National Statistics (ONS).
Deaths overall were also below normal levels for a ninth week in succession.
The number of deaths where Covid was mentioned on death certificates dropped to seven in the week ending 30 April - half the previous week's total and the lowest for more than seven months.
These accounted for 1.2% of all registered deaths in Wales.
It is a further indication of the retreat of Covid, which has resulted in low case numbers and falling hospital cases.
The trend has been for a steady decline in deaths and the weekly total is 93% fewer than registered two months ago.
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