Watch: France to ease restrictions
People will be able to share "moments with the family" over the Christmas period, French President Emmanuel Macron said on Tuesday.
He said that France had passed the peak of the second wave of virus infections. On Monday, the country reported 4,452 daily Covid-19 infections - its lowest tally since September 28.
France has reported more than 2.2 million cases and more than 50,000 Covid-related deaths since the beginning of the pandemic.
People in France will be able to go back to their favourite shops and attend religious services again next week after a month of partial virus lockdown.
However, it will have to wait until at least January 20 to enjoy a meal in a restaurant or a gym workout.
Mr Macron laid out new rules on Tuesday in France's virus strategy, after imposing nationwide restrictions last month as virus infections and deaths surged around Europe.
France's infection rate per 100,000 people is now less than a third of what it was at the start of November.
The number of people in hospitals and intensive care has been trending downward for a week.
"The peak of the second wave is over," Mr Macron announced in a televised address to the nation.
The situation remains tense, however, with hundreds of virus-related deaths per day, so the cautious emergence from the lockdown reflects that.
On December 15, some museums and cinemas will be allowed to open, and the nationwide stay-at-home rules loosened.
France will reintroduce its 9pm curfew, and the strict associated fines.
Mr Macron said that the curfew will be waived for Christmas eve and New Year's eve.
On January 20, and only if daily infections drop below the 5,000 mark, restaurants and gyms will be allowed to reopen.
Currently everyone in France needs a permission slip to leave their home and no leisure travel is allowed, although schools and some workplaces remain open.
The government ruled in line with doctors who warned not to relax restrictions too fast.
"If we let go too quickly, the virus will circulate again too quickly," Remi Salomon, head of the medical commission at the Paris hospital authority, told broadcaster France-Info on Tuesday.
Wearing legwarmers, cummerbunds or headgear made of surgical masks, owners of shops, restaurants and bars marched through Lyon on Monday to demand permission to reopen.
Some threw red flares and one held a sign reading simply: "No Future."
France has reported more infections than any country in Europe and 49,232 virus-related deaths, among the highest tolls in the world.Â
Watch: European leaders lay out COVID Christmas plans