When Tasmania transitions to Stage 3 of easing restrictions at noon on Friday, many Tasmanian venues will be able to double the number of patrons allowed at one time.
Premier Peter Gutwein announced on Wednesday the state would be moving from allowing one person per four square metres to allowing one person per two square metres.
"What we've attempted to do is to simplify our restrictions moving forward while providing significant additional freedoms in terms of the density limits we are focused on," Mr Gutwein said.
Indoor gatherings of up to 250 people will be allowed with venues with additional space or rooms able to work on a "per space" basis adhering to the two square metres rule.
Gatherings of up to 500 people will be allowed outdoors.
Mr Gutwein said rules for large stadiums would be discussed at a meeting of National Cabinet on Friday.
Markets, food courts, food vans, garage sales, car boot sales, spas, bathhouses, floatation tanks, casinos, gaming rooms and nightclubs are able to reopen.
Patrons must be seated in premises where alcohol is sold, such as pubs, bars and nightclubs, meaning activities that are not seated such as dancing are not permitted.
Indoor and outdoor community sport will be able to resume with total numbers capped at 250 people at indoor venues and 500 people at outdoor venues.
Change rooms and showers can be used although people are urged to practice good hygiene and to not use the facilities unless they needed to.
Household visits will remain capped at 20 visitors in addition to household members with Mr Gutwein noting this area had presented a challenge in Victoria.
An update on Tasmania's border restrictions will be provided on Friday.
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Labor leader Rebecca White said this was a good move by the government and a step in the right direction toward getting businesses reopened and people back into work.
"This will make a huge difference for smaller venues in particular enabling them to have more people in to their restaurants and cafes," Ms White said.
Greens leader Cassy O'Connor said she thought a lot of Tasmanians would welcome the easing of restrictions.
"Thousands and thousands of Tasmanians have lost their jobs and huge sacrifices have been made. In places like the North-West Coast the impact has been huge," Ms O'Connor said.
"Tasmanians will be able to breathe out on Friday in the knowledge they have contributed to where we are at. In the context of many places in the world Tasmania is in a very good position."
Tasmanian Chamber of Commerce and Industry chief executive Michael Bailey said the Premier had got the balance right with the two square metres rule.
"We need to ensure we have strong social distancing rules in place, but we also need to provide businesses with the capacity to trade. This is a great start and will be a big boost to business confidence," Mr Bailey said.
"The next step is to put in place sensible arrangements to open our borders and allow travel to and from other jurisdictions that have COVID-19 under control."
Tasmanian Small Business Council chief executive Robert Mallett said the switch to a two square metres rule meant the vast majority of small businesses would again be able to operate at close to normal capacity.
"Staff will be able to be better engaged and many casuals who were laid off because of the restrictions may well be rehired. A win for all," Mr Mallett said.
"Other than in the heavily tourism related sectors, business has been improving and this will give even greater opportunities for Tasmanians to further support Tasmanian businesses.
"If Tasmania continues to remain coronavirus free, we now urge the Government to look to the full easing of restrictions, as has happened in New Zealand and is scheduled in Western Australia from July 18."