The measures will lift from 12.01am on Saturday, Premier Jeremy Rockliff announced on Wednesday.
"Density restrictions will be removed from all settings and premises, meaning they will no longer be limited to one person per two square metres," he told reporters.
"Capacity limits for all events and settings will also be removed.
"From pubs and theatres to stadiums to festivals, there will be no limitations on the number of people that can attend."
Operators can still voluntarily use capacity limits as part of COVID-19 safety management.
Tasmania has recorded 17 COVID-19 deaths this month and on Wednesday had 6366 active cases. There are 45 people with the virus in hospital, with one person in intensive care.
Deputy director of public health Julie Graham said Tasmania's rolling seven-day new case average of 1007 had been stable for six-to-eight weeks.
She acknowledged case numbers had been rising in other jurisdictions.
"We are still under the death rates for other states and territories. Certainly any death is concerning," she said.
"Tasmania has been incredibly lucky, and it is reflective of our high vaccination rates that our hospital admission rates and our death rates have been lower than the rest of Australia."Â
Mr Rockliff, who has recovered from a mild bout of COVID-19, said the state government would have more to say in coming weeks about easing mask restrictions.
"While we are sensibly stepping down restrictions it does not mean we lose our COVID-safe behaviours," he said.
"Please continue to practise good hygiene, follow social distancing, test when you have symptoms (and) wear masks in high-risk settings."
Tasmanian Hospitality Association chief executive Steve Old thanked the government for bringing the island state in line with others.
"Signs have been positive in the past few months that our wonderful hospitality venues have been humming along," he said in a statement.
"This will only further assist them in bouncing back from two years of hardship."
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