The move means pubs, restaurants and cafes can open for food and non-alcoholic drinks, subject to a 6pm curfew, while non-essential shops can open their doors from 6am on Friday.
Also moving down from level 4 to level 3 of the Scottish Government’s regional restriction system are Stirling, East and South Ayrshire, East and West Dunbartonshire, Renfrewshire, East Renfrewshire, North and South Lanarkshire and West Lothian.
Ms Sturgeon told the Scottish Parliament that it had been decided not to move Edinburgh down from level 3 to 2, which would have allowed hospitality venues to stay open until 8pm, despite its cases being below the national average.
“A move to level 2 in Edinburgh would mean opening up significantly more services in our second biggest city in the two weeks before Christmas,” she said. “That move would carry significant risk of increased transmission.
“We want as much assurance as possible that the situation is as stable as possible before making that move. For that reason – and this has been a difficult decision – we have decided not to move it over to level 2 this week but we will consider this again next week.”
Ms Sturgeon said that coronavirus cases had fallen “significantly” in all 11 of the areas placed in level 4 last month, with numbers of positive tests falling in Glasgow from 281 per 100,000 population in the week of 13 November to 150 in the week of 4 December.
She said the Scottish government was responding with a “proportionate but still cautious” relaxation of restrictions.
Ms Sturgeon said Scots should “allow ourselves a smile” as the first vaccinations against Covid-19 took place north of the border on Tuesday.
“This is a milestone we have all longed for,” she said. “It offers hope, at long last, that we may now be at the beginning of the end of this pandemic.
“I want to thank everyone involved, now and in the months ahead, in delivering what will be the biggest vaccination programme in our history.
“Today we should all allow ourselves a smile.
“But we must not drop our guard.”