People from two different households will be able to meet outdoors from Monday, First Minister Mark Drakeford has confirmed.
They will need to stay in their local area - within five miles as a "general rule" - and remain two metres apart.
The change is part of a review of the lockdown rules in Wales.
The restriction on how far people can travel has sparked concern it will be unfair on those living in rural communities.
The Welsh Conservatives called it "arbitrary and cruel".
It has been illegal for groups of more than two people to meet since lockdown began in March.
Other parts of the UK have already loosened rules on meeting people outdoors.
What is changing on Monday?
- Members of two separate households in the same local area will be able to meet outdoors
- The two households can meet in private outdoor spaces, such as gardens, but should not use other people's toilets, kitchens or cutlery
- People from two households will be able to exercise together outside, but not in large groups, and must stay local and socially-distanced
- Travel to exercise is now allowed but only to local spots - travelling to a park, beach or in countryside outside your local area is still illegal. People should avoid crowded spaces
- Weddings and civil partnerships can take place if the bride or groom is terminally ill
But beauty and tourist spots will remain closed, the Welsh Government said.
People may pass through someone's home to reach a private garden, but individuals have been told not to stay inside.
The Welsh Government has been advised that the virus survives "only for minutes outside but for hours on indoor surfaces".
Wales' "stay home" slogan will be dropped, with people told instead to "stay local to keep Wales safe".
Why five miles?
The limit is based on the principle that the "further you travel, the greater the risk" and is in line with new rules in Scotland.
Mr Drakeford said people with "no signs of symptoms" could still spread the virus to others.
But he added the guidance was "for people to apply in their local geographies in Wales".
However many families have said the limit is unfair, particularly in rural areas.
What could change next?
The next lockdown review is due in three weeks. The Welsh Government said it will consider
- Re-opening non-essential retail
- Increasing capacity for childcare and public transport to support a wider return to work
- Allowing people to move house to boost the housing market
- Re-opening outdoors sites, including outdoor markets, sports courts, outdoor showrooms, and outdoor museums
- Re-opening facilities for non-professional elite athletes to train safely
The first minister said he was "signalling to businesses across Wales that they may begin preparations to be ready to resume activity in these areas, should the evidence support reopening".
'Not an invitation' for garden parties
Mr Drakeford said the Welsh Government was acting on the advice of scientists and the chief medical officer.
"People in Wales have been fantastic at sticking to lockdown but we know they have missed seeing their families and friends over the last three months," he told BBC Radio Wales Breakfast.
"So we are using the small amount of headroom we have for people to get together in a controlled way."
He urged people to use "common sense" and warned the new rules should not be used as an excuse for garden parties during the warm weather.
"We are offering permission but this is not an invitation to go into a garden, have a few beers and start mixing in a way that potentially harms you or other people," he said.
"We need to use our common sense and take responsibility. People shouldn't do things that risk these rules breaking down. It's a big step ahead so we have to do it in a careful and controlled way."
He added: "We are also asking people to stay local - by local we mean, as a general rule, not travelling more than five miles from home to reduce the risk of coronavirus spreading as people begin to travel more.
"There will be exceptions - for example, travelling to work, to seek care and shopping for essentials if they aren't available locally. Staying local will help keep Wales safe."
Darren Millar, Welsh Conservative spokesman for post-covid policy, said the five-mile rule was "arbitrary and cruel".
"This announcement is an urban solution by a Welsh Labour government that only cares about city and town life," he said. "There's more to Wales than the cities of south Wales."
Plaid Cymru's health spokesman Rhun ap Iorwerth called for a clearer plan for how restrictions will be lifted. Key, he said, was the success of measures would be "the robustness" of the Welsh test and trace scheme, due to start next week.
Brexit Party Senedd leader Mark Reckless said: "There is no proper reason to only let people see friends and family if they are local."
The Welsh Government has not set dates for when measures in Wales could be lifted, unlike in England.
Current plans envisage a traffic light-style system of red, amber and green phases, with more restrictions lifted as they progress.
However Mr Drakeford has urged non-essential businesses, such as retail, to use the next three weeks to put safety measures in place ahead of any announcement.
What are the current rules?
Since late March people have been told to stay home except for work, exercise and shopping for essentials.
Wales' exercise restrictions are more stringent than England's - people have been told to stay local and not to drive.
Most non-essential retail has been forced to close, alongside pubs and restaurants.
Exceptions include supermarkets, garden centres and pharmacies.
Schools are closed, but some are instead providing childcare for the children of key workers.
What is happening in other parts of the UK?
England, Wales, Scotland and Northern Ireland all have their own lockdown rules.
In England they are set by the UK government, led by Prime Minister Boris Johnson. In the other three countries they are set by their different governments.
Groups of six people will be able to meet outside in England from Monday.
In Scotland people will be able to meet their friends and family outside from this Friday. People have been given "strong advice" there not to travel more than five miles for leisure.
The country's First Minister Nicola Sturgeon said people from two different households will be able to meet, but must keep two metres apart. They must also remain outdoors and in groups of no more than eight.
In Northern Ireland groups of six people who do not share a household can meet outdoors.
The first minister has been dropping big hints for some time that his priority in lifting restrictions is to allow people to see friends and family if it can be done safely.
My understanding is the approach will continue to be cautious.
The strategy seems to be to make a small change and then keep an eye on the reproduction rate of the virus - the R number.
That means the rules in Wales may continue to differ from those in other nations of the UK, but Mark Drakeford believes that most Welsh voters support his cautious approach.
What is the R rate in Wales?
Health Minister Vaughan Gething has said that the R number - the rate that coronavirus is spreading - is the biggest factor in determining when lockdown measures can be eased.
If the R number is R2, it means a sick person is likely to transmit the virus to two other people.
The Welsh Government said Wales has passed the first peak of infection and and infection rates are falling, but the R rate remains at 0.8. Officials want it to remain below one.
It is believed that an R of 0.8 would lead to 500 additional coronavirus deaths by the start of August and as many 7,000 if R reaches 1.1.