The Department for Transport announced that the travel change would come into effect from 4am on Friday 19 March.
The red list - places from where travel into England is banned - was introduced to stop the Brazil and South Africa Covid variants entering the country.
Portugal was the only European country added to the list when it came into force on 15 January.
So, why is Portugal being removed from the red list, what are the quarantine rules - and have any other countries been added?
Here is everything you need to know.
What does Portugal’s removal from the red list mean?
People in Portugal will be allowed to travel to England again once the change comes into place.
The country’s removal from the red list means that returning travellers will no longer have to quarantine in a hotel, at a cost of £1,750, on arrival.
Instead, they will be able to self-isolate at home.
They can be tested for Covid on days two and eight after their journey, ending their quarantine early through the government’s test-to-release scheme if the result is negative.
But Portugal’s red list removal does not mean normal travel can resume between the country and England.
National lockdown rules are still in place here, with travel outside of England only permitted for essential reasons.
The earliest date people will be able to travel internationally on holiday is 17 May, according to step three of the government’s roadmap out of lockdown.
Yet Transport Secretary Grant Shapps recently warned prospective travellers that it was still too early to book foreign summer holidays.
He said there were still “lots of questions” to answer about “how safe it will be in June to travel”.
Ministers are currently looking at whether vaccine passports - which would give people who have received a Covid jab a way to prove that they have been inoculated - would be feasible.
Portugal has also extended a ban on commercial or private flights between the country’s mainland and the UK until 31 March, as part of its own restrictions to curb the spread of the virus.
Why is Portugal being removed from the red list?
Portugal was one of the countries added to the red list in an attempt to prevent travellers carrying concerning coronavirus variants into the UK.
There are fears that both the Brazil and South Africa variants are more transmissible and that the existing Covid vaccines may not work as well against them.
But Portugal is now being removed from the list after evidence showed that the risk of a variant being imported from the country “has reduced”, the government said.
It added that Portugal had “put steps in place to mitigate the risk from its links with countries where variants have become a concern”.
Which other countries are being removed from the list?
As well as Portugal, the Department for Transport said that Madeira and the Azores would be removed from the red list, along with Mauritius.
Have any other countries been added?
However, four other countries are being added to the red list - Ethiopia, Oman, Somalia and Qatar.
Under the travel bans, British and Irish citizens arriving into England from these countries will have to quarantine in a government-approved hotel for 10 days.
Any other visitors from the countries will be refused entry.
Qatar’s addition to the red list could have a significant impact, as its international airport is used by many travellers returning to the UK on connecting flights from Asian countries.
People who break the quarantine rules could face a prison sentence of up to 10 years.