The decision, which comes into force with immediate effect, means vaccinated travellers can now enter the country without restrictions.
A ban on large indoor gatherings, such as religious services, has also been lifted.
All quarantine measures for confirmed Covid-19 cases have also been halted with immediate effect.
Health minister Mutahi Kagwe gave details of the changes earlier, saying the rising number of Kenyans opting to get vaccinated had allowed for the loosening.
Kenya, with a population of 54 million, has recorded less than 35 daily Covid-19 infections over the past week, according to government statistics.
About 323,000 infections, and 5,600 deaths, have been recorded throughout the pandemic.
Nearly 29 per cent of Kenyan adults are fully vaccinated, more than most countries in sub-Saharan Africa.
