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Up to 30 people will be able to meet outdoors and extended households can expand to include a third from Monday, the Welsh government has said.
However an increase in the numbers able to meet indoors in homes or at events will not happen until at least late June.
The Welsh government said this would allow more people to get vaccinated.
It said there was "growing concern" about the spread of the variant first identified in India.
There are currently 97 cases of the variant in Wales, which has been named the Delta variant by the World Health Organization.
This is up 67% compared with last week.
First Minister Mark Drakeford said: "The risk of infection is significantly less outdoors than it is indoors. This is why we are phasing in the changes in this three-week cycle."
"This will allow more people to enjoy events outdoors and take advantage of the Welsh summer, while we continue to roll out the vaccination programme to all adults.
"We will review the public health situation again in a couple of weeks to see whether we can continue to relax the restrictions and restart indoor events."
The changes being announced mean from Monday:
- Three homes can form an extended household
- Up to 30 people can meet outdoors, including in private gardens, outdoor hospitality and public places
- Large outdoor events, like concerts, football matches and organised runs can go ahead for up to 4,000 people when not seated, and 10,000 when seated
Further rule changes on indoor activity will be considered by the Welsh government later in the month.
Those could include allowing six people to meet indoors in private homes and holiday accommodation and increasing the numbers able to go to organised indoor gatherings and indoor events.
Pubs and restaurants have been allowed to serve customers inside from 17 May, and last month the the Welsh Independent Restaurant Collective called for all significant restrictions to be lifted before July.
The group, representing more than 400 cafes, pubs, restaurants and hotels, urged the Welsh government to allow any six people to sit together indoors and to scrap the 2m social distancing rule.
Wales has the highest vaccination rate in the UK, with 2,161,028 people having been given a first vaccine dose, or 68.5%.
Figures also show 1,157,904 people have now had a second jab, or 36.7% of the population of Wales.
The case rate in Wales is currently 7.5 per 100,000 people over seven days.
A cluster of cases, attributed to the Delta variant, has been responsible for a spike in Conwy county, taking the case rate there to 22.
There are now 35 cases of the variant in the Llandudno, Llandudno Junction and Penrhyn Bay area, with Health Minister Eluned Morgan saying she was "very concerned".
The whole of Wales has reported 34 new positive tests a day on average in the past seven days.
That compares with 49 cases a day a month ago and 2,864 cases a day at the peak in December.
'We will find solutions'
Sarah Hemsley-Cole, of campaign group WeMakeEvents Cymru, said the announcement was "great news" for everyone who worked in the industry, after being closed for so long during repeated lockdowns.
In recent weeks a series of test events have been held, with Tafwyl Festival having a 500 attendee limit, while the upcoming Wales v Albania match at Cardiff City Stadium is limited to 4,000 spectators.
Ms Hemsley-Cole said while they were happy with the Welsh government's "cautious" approach, the test events had been "incredibly restrictive" with some only being allowed 100 people and social distancing remaining in place.
She said the change would give more parity with England, adding "ultimately, most people don't realise there's a difference", especially in sport where it is cross-border.
But she added that the 2m social-distancing rule remaining in place was a "challenge" for outdoor events, and it was difficult to maintain when people were having fun.
"The reality is, as long as there is social distancing, that is a challenge for the sector... it's a real challenge to make things work, and people sort of forget they have to maintain it," she said.
"We understand it is there to make us safe, we will find solutions and a way to make it work
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from Via PakapNews