From next month up to 50 people at a time will be allowed in pubs, cafes and restaurants in Australia's most populous state of New South Wales (NSW), authorities said on Friday.
However, patrons will be banned from standing, mingling or dancing, reports Xinhua news agency.
On Friday, NSW recorded just three new infections, taking the number of confirmed cases to 3,084.
The total in Australia stood at over 7,079, with 100 virus-related deaths.
As the country gradually scales back COVID-19 lockdown, NSW Premier Gladys Berejiklian announced that the number of people allowed in venues at one time would go from 10 to 50 as of June 1.
However, the new rules which are among the most lenient in the country, come with strict provisions to avoid the risk of a second major virus outbreak.
These include that each patron must have at least four-square-meters of space and aren't allowed to stand, mingle or dance, as well as banning the use of shared cutlery and buffets.
"This decision has been made with expert health advice and both businesses and patrons will be subject to strict rules and guidelines," Berejiklian said.
"All customers must be seated and no bookings of more than 10 allowed, in addition to many other conditions which must be met."
( With inputs from IANS )