The changes come into force from Monday 1st June. Here's what it means for Wales.
Who am I allowed to meet?
People living in two separate households in the same local area can meet outdoors from Monday - as long as they maintain social distancing. You are allowed to drive to another household, provided it is in within your local area.
What does 'local area' mean?
The Welsh Government advises that 'local' means not travelling more than five miles from your home. This is to reduce the risk of coronavirus spreading from one community to another - as people might be carrying the virus but not experiencing symptoms.
Is there a limit to how many people can meet?
No - as long as it is only two households who are meeting, there is no restriction on the number of people. It does not need to be the same people from the same households every time.
Gathering with members of more than two households is still illegal.
Why outside? Can't we meet indoors?
Meeting people socially indoors is not allowed under the rules, as it significantly increases the risk of spreading the virus.
Meeting outdoors is key, as scientists have found the virus survives only for minutes outside - but for hours on surfaces inside.
Watch: First Minister Mark Drakeford explains the latest lockdown changes
Does meeting outside include people's gardens?
Yes - people can meet in their own gardens, but this comes with a higher risk of infection as people may have to pass through someone’s private home to reach a garden.
If two households are meeting in the private garden of one house, visitors can go through the house to reach the garden, but not stay in the house. You should not use the toilets, kitchen, cutlery or anything else in another household. If you can, you should also avoid touching things indoors, such as light switches and door handles.
Can I visit members of my family who live outside my local area?
You can leave your local area to provide care for or to help someone who needs it, such as an older person, a child or a vulnerable adult - but the Welsh Government says people should consider whether there are alternative sources of support available.
Should I use a face covering when I meet another household?
This is a matter of personal choice, but guidance in Wales does not currently support the use of face coverings.
Are there any exceptions to the 'stay local' rule?
You should not leave your local area to do anything that you could reasonably be expected to do locally.
The exceptions are:
To obtain supplies and services for you or your household, for example food, medicine, veterinary care and essential household maintenance
To visit health services that are not available locally
To provide care for or to help someone who needs it, such as an older person, a child or a vulnerable adult, though you should consider whether there are alternative sources of support available
To help the NHS by donating blood
To avoid injury or illness, or escape a risk of harm
Most people in Wales live within five miles of shops and services that are essential for everyday purposes.
For those living rurally, the Welsh Government says: "We recognise that in rural areas these services may well be spread over a wider geographical area, and this means you can travel further to do the same sorts of things you could do within five miles elsewhere."
Will I be fined by the police if I travel outside my local area without reasonable excuse?
Yes - police can issue fines to people who do this.
Has the social distancing and hygiene advice changed?
No. The Welsh Government says there is a lower risk of infection if a physical distance of two metres is maintained while outdoors. This includes meeting family or friends - so no hugging or kissing.
People must also continue to wash their hands thoroughly and often.
Do these changes apply to the people shielding?
However on Sunday, the Welsh Government announced some changes in the advice for this group, which come into force on Monday, 1st June.
People who have been shielding can now take unlimited exercise outdoors and meet outside with people from another household, but should not go into another person’s house or share food with them.
What about young children at gatherings who won't understand social distancing?
The First Minister said this will be an issue for people to think about carefully, and that groups might consider not including very young children in the first instance if they cannot guarantee social distancing.
He added: "With extra freedom has to be extra responsibility."
Are non-essential shops and services open again?
Not yet - a decision on reopening these will be made at the next Welsh Government review in three weeks' time and will depend on scientific and medical evidence.
However, businesses that can comply with social distancing "should start to prepare to reopen over the next three weeks," the First Minister said.
Can I go to the beach or park to sunbathe?
People from two different households can meet or sunbathe in parks and on beaches, with appropriate social distancing and as long as they're local to the area.
Beauty spots remain closed to tourists. The message is still 'Visit Wales - later'.
Are picnics and barbecues with another household allowed?
Yes, as long as they are local, you maintain social distancing and don’t share or use the same items as the other household - for example plates, cups and food packages. Any item that is passed between two households will increase the risk of the spread of the virus.
What about people living on the England / Wales border?
Anyone living in Wales, or travelling into Wales, is therefore bound by Welsh law.
Any word on children returning to school?
Has coronavirus gone away?
Absolutely not. The First Minister has stressed that coronavirus is still circulating, and today said the risk of a second peak "cannot be ruled out at all".
"The more local you stay, the more the spread is contained," he said.
"A lower risk doesn't mean no risk. You may have no signs or symptoms, but could still be spreading the virus. The further you travel, the greater the risk of spread."
Were any other changes announced today?
Yes. Weddings and civil partnerships will now be allowed to take place if the bride or groom is terminally ill.
Who decides on the lockdown changes?
The coronavirus regulations in Wales are reviewed every 21 days - we've just had the third review. Welsh Government decisions are based on the latest scientific evidence from the Scientific Advisory Group for Emergencies (SAGE) and the advice of the Chief Medical Officer for Wales.
Both SAGE and the World Health Organisation have advised changes should only be made one step at a time.
How long will these rules be in place?
The regulations are constantly monitored and formally reviewed every three weeks. The next review is on 18th June.