Cabinet made the call to move Auckland - the country's largest city and the site of its largest Covid-19 cluster - to alert level 1 at 11.59pm on Wednesday night.
The move means passengers on public transport will no longer be required to wear masks and limits on gatherings are lifted.
Police hand out face masks to travellers at the Manukau Bus Station on August 31. The move to level 1 means passengers on public transport will no longer be required to wear masks. Photo / Greg Bowker
Epidemiologist Michael Baker - who earlier called for a level 1.5 - said returning to level 1 missed an opportunity to mandate the wearing of masks on public transport.
He said it had been difficult to make wearing masks a normal habit for many New Zealanders.
"Internationally, mask use is really emerging as a key way of managing and reducing the risk of transmission of this virus," he said.
"We haven't really established this properly in New Zealand."
Aucklanders that RNZ spoke to in the CBD have welcomed the shift, but they were cautious about dropping down alert levels.
Epidemiologist Michael Baker - who earlier called for a level 1.5 - said returning to level 1 missed an opportunity to mandate the wearing of masks on public transport. Photo / Supplied
One man, who did not want to be named, thought masks should still be compulsory on public transport and airplanes.
"I think it is a discipline that needs to be there all the time, because clearly community transmission is coming back. There will be more outbreaks," he said.
One woman, who also wished to be anonymous, said it was inevitable that the call would be made, with people already acting like it was alert level 1.
Meanwhile, hospitality joint owners are jumping for joy after the announcement.
Olivia Carter from the Soul Bar and Bistro in the Auckland Viaduct said the news was so exciting it had her heart racing.
"We really need to be in alert level 1. Our business couldn't survive on being less than that. We're excited and looking forward to what this week will now bring."
Auckland Chamber of Commerce chief executive Michael Barnett said the move is a huge relief for businesses doing it tough.
He is hoping people return to central Auckland offices to work.