Up to three households will be able to meet up during a five-day Christmas period of 23 to 27 December, leaders of the four UK nations have agreed.
People can mix in homes, places of worship and outdoor spaces, and travel restrictions will also be eased.
But a formed "Christmas bubble" must be "exclusive" and would not be able to visit pubs or restaurants together.
The leaders urged people to "think carefully about what they do" to keep the risk of increased transmission low.
They added 2020 "cannot be a normal Christmas" but family and friends will be able to see each other in a "limited and cautious" way.
However, some scientists have warned that the relaxation of Covid restrictions over the festive period could spark another wave of infections and further deaths.
The measures will see travel restrictions across the four nations, and between tiers and levels, lifted to allow people to visit families in other parts of the UK.
Anyone travelling to or from Northern Ireland may travel on the 22 and 28 December, but otherwise travel to and from bubbles should be done between the 23 and 27.
People will not be able to get together with others from more than two other households, and once a bubble is formed, it must not be changed or be extended further.
The guidance says a bubble of three households would be able to stay overnight at each other's home but would not be able to visit hospitality, theatres or retail settings.
However, existing local restrictions will still be in place mean many pubs and restaurants - such as those in England's tier three or Scotland's level four - will remain closed during the festive period.
The leaders of England, Scotland, Wales and Northern Ireland reached the agreement at a meeting on Tuesday afternoon.
In a joint statement, they said: "Even where it is within the rules, meeting with friends and family over Christmas will be a personal judgement for individuals to take, mindful of the risks to themselves and others, particularly those who are vulnerable.
"Before deciding to come together over the festive period we urge the consideration of alternative approaches such as the use of technology or meeting outside."
Published guidance for England gives further details of the rules for 23 to 27 December:
- Up to three households will be allowed to stay together and form a "Christmas bubble"
- You can form a different Christmas bubble from the people you live with normally - so you can choose to stay with different people for the five-day period
- You can meet people outside your Christmas bubble, but only outside the home and in line with the rules for the tier in which you are staying. Places you can meet those people include parks, beaches, open countryside, public gardens, allotments and playgrounds
- Children under the age of 18 whose parents do not live together may be part of both parents' Christmas bubbles
- Existing support bubbles count as one household towards the three household limit
- If a care home resident is able to leave their home, they can form a bubble with one other household - but should not form a three-household bubble. However, visits out of care homes should only be considered for residents of working age because of the risks
- Students are considered to be part of the household to which they have returned
Scientists say a typical Christmas gathering at home is the type of environment where infections can spread.
The guidance also advises people to take precautions when meeting their Christmas bubble such as washing hands frequently and opening windows to clear potential virus particles.
In a video message from Downing Street, the prime minister described the agreement as a "special, time-limited dispensation", saying: "This year means Christmas will be different."
Boris Johnson said people must make a "personal judgment" about the risk of who they form a bubble with or if they visit elderly relatives., adding: "Many of us are longing to spend time with family and friends... And yet we can't afford to throw caution to the wind."
Wales' First Minister Mark Drakeford said it was "not an instruction to travel, it's not an instruction to meet with other people. People should still use a sense of responsibility".
Scotland's First Minister Nicola Sturgeon added: "The virus is not going to be taking Christmas off, so although we want to give a little bit of flexibility for Christmas we are still urging people to be very cautious and to use this flexibility responsibly and only if you think it is necessary."
Northern Ireland's First Minister Arlene Foster said she hoped people would have space to plan, adding: "We of course recognise how important Christmas time is for so many people."
Deputy First Minister Michelle O'Neill urged people to "be responsible", saying while they wanted to mark Christmas after such a "desperate" year the relaxations would increase opportunities for the virus to spread.
She added it was hoped that an alignment with rules in the Irish Republic could be achieved.
What to do about Christmas divides opinion.
Increased mixing indoors will certainly mean there is greater transmission of the virus.
But, as chief medical adviser Prof Chris Whitty said on Monday, there is a balance to be struck between the harm the virus can cause and the societal and economic impacts of trying to control it.
He called for a "public-spirited approach".
By that he means adhering to the restrictions in the lead-up to Christmas, being responsible with the opportunity the relaxation gives people, and then immediately switching back to compliance.
If that happens, any impact could be minimised - and, of course, it will be up to individuals to decide just how much they mix within the rules.
These are very fine judgement calls by ministers.
They hope Christmas will provide respite and help steel the public for what is clearly going to be a long, hard winter.
They also feel they have little choice, believing large numbers of people would ignore pleas not to mix - and this way they can provide advice on how to enjoy Christmas as safely as possible.
But there is also the risk by sanctioning it there will be more mixing than there would have otherwise been.
Transport Secretary Grant Shapps earlier said Christmas travellers should plan journeys carefully and prepare for restrictions on passenger numbers to allow for social distancing.
Meanwhile, the government has recorded another 608 UK deaths within 28 days of a positive Covid test. There have also been a further 11,299 cases of people testing positive for coronavirus.
Gyms and non-essential shops in all parts of England will be allowed to reopen from 2 December under a strengthened three-tiered system.
Areas will not find out which tier they are in until Thursday - and the decision will be based on a number of factors including case numbers, the reproduction rate - or R number - and pressure on local NHS services.
Prof Andrew Hayward, director of the UCL Institute of Epidemiology and Health Care, and a member of the government's Sage committee, told BBC Newsnight that allowing families to meet up over Christmas amounted to "throwing fuel on the Covid fire".
He said it would "definitely lead to increase[d] transmission and likely lead to third wave of infections with hospitals being overrun, and more unnecessary deaths."
Prof Hayward said while you cannot ban Christmas, he called for clearer messaging to families about the "dangers" of socialising and inter-generational mixing.
And Paul Hunter, professor of medicine at the University of East Anglia, suggested the relaxation of restrictions at Christmas will "almost inevitably" lead to an increase in transmission.
But he said: "Providing that the new tier system is better managed than in October, any increase in cases could be relatively short-lived.
"After Christmas we will still have to live through a few more months of restrictions at least."
Jillian Evans, the director of health intelligence at NHS Grampian, said the easing of restrictions over Christmas would cost lives.
"We've got winter weather, we know that people are more susceptible to infection over the colder period, and we've got a festive period where people will be socialising," she said.
"Those are facts, and I would rather be honest and tell you that those are the facts, and be truthful about it so people can understand the risks that they're taking."
Kate Nicholls, chief executive of the UKHospitality lobby group, said there was "muddled thinking" over the Christmas rules and they would cause the sector more economic harm.
She said: "Hospitality venues should be considered part of the solution for providing people a well-deserved safe and enjoyable Christmas, especially given that allowing multiple households to mix in the confines of private homes presents an exponentially greater risk."