Double-jabbed people in England who are close contacts of Covid cases will be told to take lateral flow tests for seven days in a row from Tuesday.
Currently, if someone comes into contact with an individual who has tested positive for the Omicron variant, they must self-isolate at home for 10 days, regardless of their vaccination status.
Unvaccinated adults must continue to self-isolate for 10 days if they are a contact of someone with Covid-19.
The government said the change in guidance "aims to reduce pressures on people's everyday lives by replacing the requirement for Omicron contacts to isolate for 10 days".
It comes after the UK Health Security Agency (UKHSA) said the country could see one million Omicron cases by the end of December.
The new testing policy also aims to protect the public by identifying asymptomatic cases and stopping chains of transmission.
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The DHSC said that, additionally, testing daily will help with understanding how and where the virus is spreading.
People will be contacted by NHS Test and Trace by phone, email or text or they will receive a notification from the NHS Covid-19 app telling them they are a contact of someone who tested positive and what action they need to take.
They will be advised to get a box of seven lateral flow tests free of charge from NHS Test and Trace, either through pharmacies, schools or home delivery by ordering online.
Under the new testing rules, anyone whose rapid flow test comes back positive, or who develops Covid symptoms, should self-isolate and take a confirmatory PCR test to verify the result.
Health secretary Sajid Javid said: “The Omicron variant is quickly gaining ground in the UK and is expected to become the dominant strain by mid-December.
“We are taking this proportionate and more practical measure to limit the impact on people’s day-to-day lives while helping to reduce the spread of Omicron.
Mr Javid also urged people to get their booster jabs as the programme extends to people aged 30 and over.
The national booking system will open to everyone aged 30 to 39 so that they can arrange to get the top-up jab three months on from their second dose.Also on Sunday, cabinet minister Nadhim Zahawi said that the first people in the UK have been hospitalised after catching the Omicron Covid variant.Mr Zahawi confirmed the admissions while warning that the variant is "so infectious, it will seek [unvaccinated people] out".