The physical distancing requirement is being cut from two metres to 1.5 metres from Monday, while the midnight curfew on restaurants and nightclubs is also being lifted, as is the requirement to be seated at tables in bars.
The maximum size of gatherings will be raised on Monday from 300 to 1,000 people, the government said, so long as the number of people to be contact-traced in case of an infection remains at no more than 300, through measures such as separating groups into sections.
Any number of people can gather from Saturday for political demonstrations -- so long as participants wear a mask.
Switzerland stopped short of imposing strict confinement in measures introduced in mid-March -- and most of those restrictions have already been lifted.
The landlocked country began the process on April 27, when barbers, family doctors and hardware stores were allowed to reopen.
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Distancing, tracing to stay
"We have once again found lots of our old freedoms: bars and restaurants are open again, we can gather together," President Simonetta Sommaruga told a press conference in Bern.
"At the same time, the virus is still here. Nobody knows how the situation will evolve.
"In other words: we have to stay cautious."
The government said citizens should still refrain from physical contact with people from outside their household, while the need for distancing, hand-washing and contact-tracing will remain.
"We will have to put up with these restrictions for some time to come. This is the only way of protecting ourselves and others," it said in a statement.
Closer proximity than 1.5 metres will be allowed if masks are worn or partitions installed, while "hand sanitizer or washbasins with soap will now have to be made available everywhere", the government said.
Events with more than 1,000 people are set to return from September.
Switzerland, population 8.5 million, has recorded 31,134 confirmed cases of COVID-19 and 1,679 deaths from the virus at June 19.
The numbers of infections, hospitalizations and deaths have remained stable at a low level for several weeks, with just 599 new cases recorded since May 19.