The limits on social gatherings will be increased to 100 from midday on Friday, Prime Minister Jacinda Ardern says.
This means churches can resume services and the 50-person limit on funerals and tangi will be lifted.
However, hospitality venues will still need to allow for physical distancing, which meant no dance floors.
Cabinet will look at whether the country was ready to move to level 1 on June 8, and will mark June 22 - four weeks from today - as the date be considered to move to level 1.
Ardern said that on June 8, Cabinet would check alert level 2 settings again, and on June 22 Cabinet would look at when the country could move to alert level 1.
Ardern said moving to level 1 should be done as quickly as safely possible.
"It's about risk mitigation," Ardern said, and while New Zealand was in a good place, Covid-19 was still showing up in people four weeks later.
Physical distancing obligations would still apply at weddings and funerals, Ardern said.
"We have already opened our bars. Across the ditch, that isn't even on the horizon ... we are moving faster than many."
People planning a Friday night party should keep a list of who was invited.
Today's announcement was an intention to give people notice of the change, but she was also mindful of religious communities that normally congregate on Fridays.
Ardern said that there were no more new Covid cases due to stepping down to level 3, which was "very good news".
That had bucked the trend in other countries, some of which had experienced a second wave of cases.
She said Cabinet had today decided to increase gatherings to 100 from noon this Friday, May 29.
Church services, weddings and funerals will all be able to have 100 people.
It would allow community sport to operate more easily, she said
"Many more gatherings will be able to occur. These changes are good news for business."
Director general of health Dr Ashley Bloomfield said the advice to allow gatherings up to 100 people was based on how well the country had been doing battling Covid-19.
Bloomfield said allowing 100-person gatherings was because of the "very low" level of new Covid-19 cases.
"We felt not only should we move to 100, but we should spend two two-week periods at the full alert level 2, and then actively consider moving to alert level 1."
Key points about what we can expect as we continue in alert level 2:
- All gatherings 100 will be allowed from 12 noon on Friday, May 29.
- The decision to move to Alert Level 1 will be made no later than June 22.
- Hospitality industries must still keep patrons seated, tablet service and socially distanced groups.
- Physical distancing may also be relaxed on public transport and planes, but this will be announced on May 25.
- Local tourism encouraged.
- Widespread surveillance and contact tracing continued.
- Physical distancing continues to be recommenced.
- Stay home if you are sick.
- Measures at the border continued.
- On June 8 alert level 2 settings will be checked.
- Phased de-escalation will be key.
Find out more information about Alert Level 2 at covid19.govt.nz.
This article was first published NZ Herald on the and is republished here with permission.