Bristol and North Somerset will move in to Tier 2 from Saturday 19 December.
South Gloucestershire, now has the highest coronavirus rate in the South West, will remain in Tier 3.
There has been a "huge reduction" in cases in Bristol and North Somerset since Tier 3 restrictions were introduced two weeks ago - and so Matt Hancock has revealed both areas will move down to Tier 2.
This means pubs and restaurants can reopen - but alcohol can only be served with a substantial meal.
People are still not allowed to mix indoors with people from outside of their household.
Bristol Mayor, Marvin Rees, has welcomed the easing of restrictions which will allow some businesses, particularly the hospitality sector to reopen its doors. He however urged caution over the coming weeks to prevent another rise of infections in the new year.
Mayor Rees said: “Thank you to everyone in the city for playing their part to get the rates of infection down. The next few weeks are crucial so we don’t see another significant rise in cases, so please be cautious and still limit who you see and follow the guidelines.
“This is very welcome news for many people in our city, particularly as we look towards the end of what has been a very difficult year. We must continue to work hard to keep the numbers under control so we don’t go back to where we have been. While I know it has been difficult, our actions have saved lives.
“Infection rates are lower than they were but COVID-19 is still spreading in Bristol and we must continue to protect each other. This Christmas and New Year will look very different to last year, but if we all continue doing the best we can to follow guidelines, we can be hopeful of a return to the things we love next year.”
What can you do in each tier from December 2?
Tier 1: Up to six people can meet indoors or outdoors. Pubs and restaurants can open, with last orders at 10pm and closing at 11pm.
Tier 2: No mixing indoors, apart from support bubbles. Up to six people can meet outdoors. Pubs and restaurants can open, with last orders at 10pm and closing at 11pm - but alcohol can only be served with a substantial meal.
Tier 3: No mixing indoors. People can only meet outdoors in limited places such as parks and public gardens. Pubs and restaurants must close, with the exception of takeaway sales.