The dine-in ban last only a day after Hong Kong’s government faced widespread public anger.
On Wednesday, restaurants in the city of 7.5 million were only allowed to serve takeaways as the government sought to tighten physical distancing measures.
Hong Kong is currently experiencing a fresh wave of Covid-19 cases.
But social media was quickly swamped by photos of primarily blue-collar workers forced to eat on pavements and parks — and even inside public toilets to escape a torrential downpour.
Restaurant groups with links to influential pro-Beijing parties also voiced dismay at the measures, which had been urged by epidemiologists to slow infections.
On Thursday city authorities published new guidelines saying restaurants could operate dine-in facilities — but only during the day, at half capacity, and with no more than two people to a table.
In the evenings they must stick to only serving takeaway meals.
In a statement, the government said the suspension of dine-in meals had brought "inconvenience and difficulties".
Hong Kong had been a poster child for tackling the virus, with local transmissions all but ended by early summer.