From 8 June, restaurants, hotels, shopping centres and places of worship will be allowed to re-open in many areas in the first stage of a three-phase plan.
Weeks later, probably in July, schools and colleges will resume teaching.
But areas with high numbers of Covid-19 cases will remain under tight lockdown.
The plan comes after India registered a new record single-day rise in confirmed infections, with nearly 8,000 cases reported on Saturday.
In total India has recorded some 174,500 cases and nearly 5,000 deaths. The nation of 1.3 billion has been hit less hard by the coronavirus than many other countries.
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It went into a strict lockdown more than two months ago when the confirmed caseload was in the hundreds. Official data suggests the decision prevented the loss of between 37,000 and 78,000 lives.
However the cost to the economy has been high and pictures of millions of informal workers leaving cities for their rural villages after losing their jobs – some of them on foot – shocked the country.
Health officials say that they are able to further lift the lockdown in many places because most cases have been restricted to urban areas in a handful of states.
More than 80% of the active cases are in five states – Maharashtra, Tamil Nadu, Delhi, Gujarat and Madhya Pradesh – and more than 60% of the cases are in five cities, including Mumbai, Delhi and Ahmedabad, according to official data.