The shift to stage three restrictions will also permit up to 250 people at indoor venues, provided spacing requirements are followed.
However, a cap of 20 household visitors will remain, with Premier Peter Gutwein using a recent COVID-19 spike in Victoria as a cautionary tale.
“It’s obviously been challenging for Victoria and it’s one matter that we would ask people to be sensible with and use their common sense,” he told reporters on Wednesday.
The one person per four square metre rule will be eased to two metres on Friday.
Community sport and contact training have been given the green light, while casino and gaming venues, markets and garage sales can resume.
Tasmania has gone 39 days without a recording a COVID-19 case and there are no active cases in the state.
The move to stage three is about three weeks ahead of schedule.
The state government has announced a previously promised independent review into the state’s deadly northwest outbreak will begin next month and deliver findings by the end of October.
The cluster, responsible for more than 150 cases, shut Burnie’s two hospitals and forced hundreds of staff into quarantine in April.
An announcement on when the island’s border will reopen will be made by the state government on Friday.
“We cannot stay locked up forever and we have to find a path forward but one that people feel safe with,” Gutwein said.
“We will see positive cases in Tasmania, whether we open our borders or not.
“We’re in a very good position should the virus bubble up somewhere, to get on top of it and shut it down.”
While many venues have reopened in some capacity, Museum of Old and New Art owner David Walsh has revealed the popular gallery will not open its doors until at least October.
By Ethan James