At midnight local time (16:00 GMT Tuesday), restrictions were relaxed to allow most people to move freely around the city of some 25 million people.
But at least 650,000 residents will remain confined to their homes.
China's overall policy of "zero Covid" remains in place and people catching Covid face quarantine or hospital.
Their close contacts also face the prospect of removal to quarantine and the area immediately around where they live being locked down again.
