The First Minister described a more positive than expected situation in Scotland in an update to MSPs on Tuesday, pointing to a reduction in case numbers and hospitalisations, which she said meant the country had “turned the corner” on the Omicron wave.
Ministers will also engage with businesses about a phased return to the office from the beginning of next month.
The advice to limit social contact to three households will also be removed from Monday.
However, the First Minister asked people to remain cautious and continue to keep gatherings “as small as your circumstances allow”, and warned the NHS was still under “acute” pressure.
It comes as 7,752 new cases of Covid-19 were reported on Tuesday, while 1,546 people were in hospital with Covid and 42 in intensive care.
Business leaders greeted the relaxation of restrictions with relief, though some called for easier access to funding support and others criticised the lack of certainty over next steps.
Dr Liz Cameron, chief executive of the Scottish Chambers of Commerce, said: “The removal of the operating limits placed upon the hospitality, retail and evening economy is good news and will be welcomed by many businesses.
"With these restrictions lifting from 24th January, these sectors will finally be able to reopen fully and work to rebuild confidence after what has been a bleak winter.”
She added: “It will come as a relief for many hospitality and licensed premises that the Government have chosen not to extend the vaccine passport scheme at this time.
"To do so would burden these businesses with further costs at a time when they simply cannot afford them and place jobs at risk. Any potential extension to the scheme must come with immediate financial support and be properly evidenced."
But Dr Cameron said it was still a “great disappointment” that some restrictions, such as advice around home working, still remained.
Andrew McRae, the Federation of Small Businesses (FSB) Scotland policy chair, said: “Many of the people behind local businesses across Scotland will be relieved to hear they will soon return to trading conditions that are closer to normal.
"We’re also pleased the First Minister has listened to our representations about the disproportionate burden vaccine passports would have placed on smaller firms.
“However, the withdrawal of some Covid restrictions doesn’t mean that local economies will necessarily bounce back. Public figures now need to work hard to build business and consumer confidence.”
The Scottish Licensed Trade Association (SLTA) also welcomed the easing of restrictions.
Colin Wilkinson, SLTA managing director, said: “We are delighted that businesses can now look forward to the removal of one-metre physical distancing measures along with table service no longer being required, although we would have preferred the lifting of these measures with immediate effect."
He said the group was “concerned” the possibility of widening the Covid certification scheme had not been fully ruled out.
The Scottish Government has begun work on a new strategic framework for managing the Covid pandemic, to be published in coming weeks.
The situation in Scotland is much less severe than could have been expected, Ms Sturgeon said, adding that she hoped the country was once again entering a “calmer phase of the epidemic”.
She said: “That then allows us to consider the adaptations we might need to make to build our resilience and manage the virus in a less restrictive way in future as we do move into an endemic phase.”
But despite this “renewed optimism”, Ms Sturgeon warned the health service remained under “significant pressure”.
"Although cases are now falling, the NHS remains under acute pressure and staff absences are still causing some disruption across the economy and critical services,” she said, adding the past couple of weeks have likely been “among the most difficult the NHS has ever faced”.
If circumstances change and cases rise again, Ms Sturgeon warned an extension to the Covid certification scheme may once again be considered.
"Given that cases are now falling quite rapidly, and the current wave is receding, we decided that we will not at this stage extend the Covid certification scheme to other premises,” she said.
“We will, of course, reconsider this should circumstances – and therefore the balance of judgement – change in any significant way.
“If cases were to start to rise very sharply again, extension of certification may well be a more proportionate alternative to other, more restrictive measures.
"However, our conclusion today, given the improving situation, is that extending certification would not be proportionate at this stage.”
Scottish Conservative health spokesperson Sandesh Gulhane welcomed the decision not to extend the scheme, but called for the certification requirement to be scrapped in all settings.
“For many Scottish businesses, it remains a burden and a potential risk, despite there being no evidence that it works,” he said.
“Nicola Sturgeon should accept that this scheme is a dud and scrap it altogether.”
Scottish Labour leader Anas Sarwar called for a new system setting out milestones which would trigger fresh restrictions in future.
“We all hope the worst is behind us, but going forward any changes in these restrictions cannot be ad-hoc,” he said.
“We need a system that sets clear trigger points on what people can expect when cases rise, which lays out what support people will be entitled to and when.
“But we still don’t know what the framework will include and when exactly we will get a chance for meaningful debate of detailed proposals.
“Restrictions, however well intentioned, have had a detrimental impact on people’s mental health and wellbeing. They cannot be expected to live their lives like that again.”
Liberal Democrat leader Alex-Cole Hamilton welcomed the move not to expand the Covid certification scheme, and also called for more transparency in imposing future restrictions.
"Today’s announcement will represent light at the end of the tunnel for many people, not least in the hospitality sector, which was hobbled by the restrictions over Christmas,” he said.
"Many of those people are still looking for answers, and answers matter. People need to trust that, if further restrictions are required in the future, they will be based in transparency and in a science that they can see.”