Bars, restaurants and other venues will reopen with restrictions on Monday amid continued declines in COVID-19 infections and hospitalizations in Minnesota.

Gov. Tim Walz announced the dial-back in the state's pandemic response on Wednesday, noting that Minnesota's COVID-19 case rate has fallen below "pre-surge levels" and that bars and restaurants can operate at minimal risk if customers comply with rules that prevent viral transmission.

"The way we help them out is, let's not let the virus surge again. … By wearing a mask and social distancing, that keeps your local bar and restaurant open. It keeps your school open. It keeps your hospital capacity under" critical levels, the governor said.

Bars and restaurants can resume indoor service at 50% capacity but with 10 p.m. curfews and caps of six-person tables and two-person bar groups spread 6 feet apart.

Movie theaters, bowling alleys and museums can reopen at 25% capacity. Most venues must limit the number of people inside to no more than 150, including fitness clubs, which can offer classes of up to 25 people and operate at 25% capacity as long as workout machines are kept 9 feet apart.

Amateur sports games can resume Jan. 14 with spectators, subject to indoor and outdoor capacity limits. Places of worship still must operate at 50% capacity but no longer have to observe numerical caps.

Walz ordered the closure of indoor service at bars and restaurants, and other restrictions, amid a fall surge of COVID-19 that has since declined in the Upper Midwest even as it radiated to the rest of the country. Minnesota hospitals neared breaking points around Dec. 1, when 399 people with COVID-19 filled intensive care beds in the state, but that number has dropped to 140.

The pandemic has caused at least 5,528 deaths and 427,587 infections with the novel coronavirus that causes COVID-19 in Minnesota, when including 67 deaths and 2,346 infections reported on Wednesday.

"We are still at a fairly high rate of infection ... but much lower than we were in November and December," Walz said.

Health officials remain concerned that holiday gatherings could have fueled more viral transmission. The seven-day positivity rate of diagnostic testing had dropped from 15.5% on Nov. 10 to 4.7% on Dec. 24, but has since increased to 6.5% as of Dec. 28.

A mask mandate remains in place for indoor public spaces, and Minnesota continues to limit gatherings to no more than 10 people from two households indoors or 15 people from three households outdoors.

Hospitality Minnesota had criticized the governor for singling out bars and restaurants with restrictions and supported the latest move.

"Reopening will bring in much-needed revenue at a desperate time for these businesses," said Liz Rammer, the trade group's chief executive. "We know that operators committed to following the protocols will keep their guests and workers safe."

A group of 27 bars and restaurants that sued the state on Monday said it was dropping its case and claimed victory in compelling the governor to allow indoor food and drink service again.

Senate Majority Leader Paul Gazelka, R-East Gull Lake, had criticized the governor's pandemic response and said he was "glad" that Walz loosened restrictions.

"Now it's vitally important Walz manage a faster vaccination process, so we don't have to go through this again," he said. "Protecting the vulnerable with a vaccine is going to [be] the key to reopening."

Minnesota has prioritized limited initial quantities of Moderna and Pfizer COVID-19 vaccines for health care workers who are at greater risk for viral exposure and long-term care residents who are at greater risk of severe illness due to their age and underlying health conditions.

The Minnesota Department of Health on Wednesday reported that 81,167 people in the state had received first doses of the two-dose vaccines — not including people vaccinated at federal sites such as the Minneapolis VA Medical Center or Cass Lake Indian Health Service.

The state on Wednesday also reported that 396,350 doses had been allocated and distributed to Minnesota, but health officials stressed this includes doses still being shipped and not available for injection. State infectious disease director Kris Ehresmann said the total number of doses that has actually reached Minnesota should be about 288,000 by Thursday.

The gap between doses distributed and injected has led to criticisms that vaccine campaigns are going too slowly in Minnesota and other states.

Many started cautiously to make sure providers and the public had confidence in the vaccines, said Dr. Nancy Messonnier of the U.S. Centers for Disease Control and Prevention. "Now that the holiday is over, I expect this program to continue to escalate and actually escalate really quickly."

Walz said he is "right with" people who are impatient but that he expected more vaccinations soon as well.

"We will continue to push that envelope but always do it as safely as possible," he said.

The governor shortened his public address regarding the dial back in Minnesota's pandemic response due to the unrest in Washington, D.C.

The new order comes with nuances. While youth sports games are permitted, for example, teams are discouraged from playing in regional or out-of-state tournaments.

Wedding receptions can resume with capacity caps, but if they involve food and drink then they are subject to gathering limits of 10 people from two households indoors.

Staff writers Glenn Howatt and James Walsh contributed to this report.