The Foreign and Commonwealth Office (FCO) has advised against all but essential visits to the country for the past two years following the June 2015 beach attack in which 30 Britons were killed.
But the FCO announced on Wednesday that it has withdrawn the advice for the capital Tunis and major tourist resorts.
The UK continues to advise against "all travel" and "all but essential travel" to some areas of the country, including those nearer the Libyan border.
The FCO said it has kept its assessment of the risks of British nationals travelling to Tunisia "under constant review" since the Sousse attack.
Having "carefully reviewed conditions" in the country - including the threat from terrorism and improvements in the Tunisian security forces - the Government decided its travel advice should change.
Minister for the Middle East and North Africa Alistair Burt said: "Our travel advice aims to help people make their own informed decisions about foreign travel. Advice for Tunisia and for every country is regularly reviewed.
"This update reflects our latest assessment that the risk to British nationals in Tunisia has changed.
"This is in part due to the security improvements that the Tunisian authorities and tourist industry have made since the tragic terrorist attacks in 2015, with support from the UK and international partners.
"Whilst we are changing advice against all but essential travel in most of Tunisia, there remain real risks for British nationals and I recommend people read our travel advice before planning their travel."
Some 440,000 people from the UK visited Tunisia in 2014, according to the Office for National Statistics.
Demand was reportedly even higher during the following year, until the Sousse attack in which gunman Seifeddine Rezgui killed a total of 38 tourists.
Terror group Islamic State claimed responsibility.
The Tunisian National Tourist Office in the UK warned last year that the Government's refusal to relax its travel advice was allowing the perpetrators to believe they were "on the winning side".
Tarek Aouadi, then-director of the organisation, told the Press Association that a third of his home country's hotels had closed due to the reduction in tourism.
He said: "Tunisia shouldn't be penalised because very hurtful, criminal people wanted to damage its economy."
There have been no terrorist incidents targeting foreign tourists in Tunisia since the Sousse attack, the FCO said.
The change in travel advice brings the UK into line with several other countries including the US, France, Italy and Germany.