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“But there are risks ahead, so please be vigilant.”
New Zealand, with a population of five million has recorded 1,147 coronavirus cases, including 21 deaths.
The number of new cases has been in single digits since mid-April, with three new infections recorded on Monday.
Under Level Two restrictions, international borders remain closed but life domestically will return to something approaching normality.
While social distancing must still be followed, the advice that people isolate themselves at home and “stick to your bubble” will no longer apply.
“This is a transition out of our bubbles, you can see people you haven’t seen in a while, you just can’t do it all at once,” Ardern said.
“At Level Two we are out and about again, just about all parts of the economy are opening up again.”
The lockdown was first eased two weeks ago, allowing food takeaways and resumption of some recreational activities, but the freedoms granted by the latest relaxation will be far greater.
Those aged over 70 will be allowed out again after more than seven weeks of mandatory quarantine.
Domestic travel will be allowed, providing a boost to the crippled tourism industry and schools will fully reopen next Monday.
Bars will not be back in business until May 21, giving them extra time to ensure they can keep patrons properly separated.
Team sport will also return, with planning already underway to start a domestic version of Super Rugby on June 13 involving the competition’s five New Zealand-based teams.
Ardern said the move to Level Two would be reassessed after two weeks, with further easing possible depending on developments.
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