Prime Minister Viktor Orban announced on Saturday that movement restrictions on Budapest residents would be lifted next week.
Mr Orban said the Hungarian capital region has made sufficient progress in the fight against the novel coronavirus.
Among other things, Budapest residents will be able to leave their homes again from Monday onwards without having to provide a good reason.
Shops of all kinds will also be allowed to stay open longer, and restaurants with outdoor seating will be free to receive guests once again.
The rest of Hungary has enjoyed the same freedoms for almost two weeks.
However, social distance rules and compulsory face masks continue to apply throughout the country.
The number of infections in Hungary, and especially in Budapest, has fallen sharply.
By Saturday, 3,473 people throughout the country were confirmed infected with the Sars-CoV-2 virus, which can cause Covid-19. So far 448 deaths have been reported.