Mandatory mass tests have been restricted to high-risk areas only and people with mild symptoms can now self-quarantine themselves at home.
China has announced a nationwide loosening of Covid restrictions following protests against the hardline strategy that grew into calls for greater political freedoms.
Under the new guidelines released on Wednesday, some asymptomatic and mild cases of Covid-19 can now quarantine at home, ending a requirement that all positive cases be isolated in centralised government facilities.
The frequency and scope of PCR testing will also be reduced, the National Health Commission (NHC) said.
Mandatory mass testing -long a tedious mainstay of life in zero-Covid China - will be restricted to "high-risk" areas and schools.
People travelling between provinces will also no longer require a negative test taken within 48 hours, and they will not have to test upon arrival, according to the new rules.
The announcement came in the wake of rare demonstrations across the country against the ruling Communist Party's hardline zero-Covid strategy.
The protests expanded into calls for more political freedoms, with some even calling for President Xi Jinping to resign.
Wednesday's announcement came hours after the government released further data showing the crippling economic impacts of zero-Covid.
Imports and exports plunged in November to levels not seen since early 2020.
Imports in November fell 10.6 percent year-on-year, the biggest drop since May 2020, according to the General Administration of Customs.
Exports fell 8.7 percent over the same period.