Canada will allow fully vaccinated U.S tourists into the country starting from August 9.
Officials announced the new travel rules on Monday and said that international visitors from other countries will also be permitted to enter on September 7.
Since March 2020, the land border between the two countries has been closed.
However, the U.S has allowed Canadians to fly in, while Canada has not allowed Americans to do the same.
Many say the ban has crippled their businesses.
Companies in Canada and the U.S, especially the travel and airline industries, have pushed for an end to restrictions on non-essential travel between the two countries.
Prime Minister Justin Trudeau pointed to the rising vaccination rates for prompting the change.
Fifty percent of Canadian residents are fully vaccinated and 75 percent have had one shot.
Meanwhile, Canadian Public Safety Minister said U.S. officials told him it was likely Washington would extend its land border restrictions, which expire on Thursday, for an additional month.
On Monday, when asked if the U.S would follow Canada's lead, White House Press Secretary Jen Psaki declined to say.