The UK has removed the requirement to self isolate for 14 days after visiting Portugal, from 4am on 22 August.
The country is now exempt from the FCO advice against all non-essential international travel.
Transport secretary, Grant Shapps, said: “Data also shows we can now add Portugal to those countries included in Travel Corridors.”
He added: “As with all air bridge countries, please be aware that things can change quickly. Only travel if you are content to unexpectedly 14-day quarantine if required, I speak from experience.”
Luis Araujo, president of Turismo de Portugal, said: "We are now delighted to have arrived at a decision which we feel far better reflects the reality of the situation in Portugal.
“Portugal has been welcoming guests from the United Kingdom since the beginning of July, therefore this is not the case of a country just opening its doors after battling the worst of the pandemic, but the case of a destination which has been operating with the capacity for international visitors for some time now following effective early action in the battle against the virus.
“While this has been a period which nobody will ever forget, a period of time which has left behind a trail of destruction, sorrow, and pain – we are so thankful to be able to open our arms, even wider than before, to the people of the UK.”
"We are expecting a significant increase in bookings following this new partnership. The Algarve is the third most popular European destination for British travellers and this lifting of quarantine restrictions enables our UK guests to return and experience the second half of the summer season.
"Over the past five months, Portugal has been recognised for managing the virus exceptionally well, we locked down early and really led the way in reducing the spread of infection. It, therefore, came as a real shock to be excluded from an initial partnership with the UK - especially when our rate of infection does not justify this decision.
"In the Algarve, numbers of cases have always remained extremely low and our resort has been open for almost 2 months now without numbers increasing.
"Following Covid-19, guests are going to want to learn new things, experience a bit of adventure and will really appreciate what a holiday together means. I am predicting a rise in demand for outdoor living, enriching experiences and a relaxed lifestyle."