The island has largely kept its borders closed and implemented strict quarantine rules throughout the coronavirus pandemic, keeping infection numbers low at the expense of being internationally cut off.
The government started to move away from its zero-Covid strategy in April towards accepting endemicity once its population was well vaccinated.
From October 13, authorities will eliminate quarantine and ask arrivals to self-monitor for seven days, cabinet spokesman Lo Ping-cheng quoted Premier Su Tseng-chang as saying on Thursday.
Visitors currently have to undergo a mandatory three-day hotel quarantine, followed by four days of self-monitoring where they are expected to avoid crowded places.
Visa-free travel for travellers from certain countries will resume from September 29 and the ban on tour groups will be lifted in October, Lo added.
The new measures will allow "the public to fully return to normal life, Taiwan to open its door to welcome back tourists and all industries to be more active and prosperous", he said.
But some tourism industry experts said Taiwan will still struggle to compete for visitors with other destinations in the region because of its self-monitoring rules.
"The whole world except China and Taiwan have opened up, and Taiwan has already been too slow and too late," said Robert Kao, an expert on tourism management and operations at Tainan University of Technology.
He described the seven days of self-monitoring with no quarantine as "meaningless", and added that "tourists would opt for countries like Japan or South Korea where there are no such restrictions".
Taiwan saw nearly six million domestic coronavirus infections this year, although over 99 percent of the infected had mild or no symptoms, with a fatality rate of 0.16 percent, according to official data.
