Prime Minister Giuseppe Conte said the measures would be relaxed from 4 May, with people being allowed to visit their relatives in small numbers.
Parks, factories and building sites will reopen, but schools will not restart classes until September.
It comes as the country recorded its lowest daily death toll in weeks.
There were 260 new virus-related deaths on Sunday, the lowest daily figure since 14 March. The total is now at 26,644, Europe’s highest official toll.
Italy has confirmed 197,675 cases of the virus, according to data from Johns Hopkins University, which is tracking the disease globally.
Other countries like Switzerland and Spain are also relaxing their measures.