Under level three, the virus is considered to be "in general circulation" and there could be a "gradual relaxation of restrictions". Health Secretary Matt Hancock said the change was "a big moment for the country" and showed that the government's plan was working.
The UK has lowered its Covid-19 alert level from 4 to 3, meaning that transmission of the virus is no longer judged to be “high or exponentially rising”.
The downgrade, which was endorsed by all four chief medical officers, could pave the way for some physical distancing measures to be eased, but they cautioned that the pandemic was not over.
The UK has been at level 4 since the five-tier alert system was announced in May, and the shift to level 3 means that Covid-19 is now considered to be “in general circulation”, with the threat level moving from “severe” to “substantial”.
The chief medical officers said levels of infection meant there were still likely to be localised outbreaks of the disease.
The alert level is set by the joint biosecurity centre, based on evidence including the “R”, or reproduction number, and the number of confirmed cases at a given time.
In a statement, the chief medical officers said: “The CMOs for England, Scotland, Wales and Northern Ireland have reviewed the evidence and agree with this recommendation to move to level 3 across the UK.
“There has been a steady decrease in cases we have seen in all four nations, and this continues. It does not mean that the pandemic is over. The virus is still in general circulation, and localised outbreaks are likely to occur.
“We have made progress against the virus thanks to the efforts of the public and we need the public to continue to follow the guidelines carefully to ensure this progress continues.”
The health secretary, Matt Hancock, said: “The UK moving to a lower alert level is a big moment for the country, and a real testament to the British people’s determination to beat this virus.
“The government’s plan is working. Infection rates are rapidly falling, we have protected the NHS and, thanks to the hard work of millions in our health and social care services, we are getting the country back on her feet.”
Last month, members of the government’s Scientific Advisory Group for Emergencies (Sage) criticised the government for easing restrictions, by allowing groups of six people to meet up outdoors and encouraging people to return to work, before the threat level had been brought down.
Matt Keeling, a professor of populations and disease at the University of Warwick, said the change in alert level was justified by the latest evidence, which showed the number of cases were at levels comparable with early March and were continuing to fall slowly.