It had already been confirmed that hospitality venues across the country would be able to reopen following the 17-day shutdown, which began on 23 October, but the terms for their operation had been unclear.
Under the new regulations up to four people from different households will be able to in indoor hospitality settings, although larger groups of people who all live in the same house will be allowed to eat and drink out together providing they can show they are from the same dwelling.
"This is a permission, not something we are encouraging people to do," First Minister Mark Drakeford said, laying out the new rules.
"It is the most challenging change from a public health perspective and will be kept under continuous review.
"Its success depends on the actions of the sector and each of us to use this permission responsibly and sparingly."
Additionally, the 10pm ban on alcohol sales will remain in force across Wales.
Responding to the First Minister's announcement, UKHospitality Cymru executive director David Chapman said: “It is good to see that hospitality businesses in Wales will be reopening, albeit under much more severe restrictions than are being applied in other parts of the economy.
“For the time being, businesses will have to engage with the new rules and make the best possible success of them before, hopefully, moving towards a better arrangement.
“The impact these new restrictions have on the viability of our businesses is going to be key. The Welsh Government must ensure it fully reviews the restrictions in two weeks as indicated.
"We need to give our financially devastated hospitality businesses the best possible chance of survival while ensuring that public health is not compromised.”
Prior to the 'fire-break', much of Wales was under people local lockdown with people only able to meet in indoor settings with other members of their own household.
Alistair Darby, CEO of Wales’ largest brewer S.A. Brain, welcomed the relaxation of the single household rule, but raised concerns about the 'verified identification' of customers.
He said it was not clear what it meant as there are no ID cards and the scheme could result in 'frustration and irritation' towards staff.
Darby added that the company supported test and trace, but would be worried that verification could lead to conflict between staff and customers.