Commander of the Joint Operation Command in Baghdad, Major General Qais al-Mohammadawi, said late on Tuesday that restrictions had been completely lifted in Baghdad following days of protests which have left dozens of demonstrators dead, Presstv Reported.
Mohammadawi added that the decision was taken after cooperation between protesters and security forces.
Earlier in the day, Prime Minister Adel Abdul Mahdi said the protests exposed issues that have piled up following the US-led invasion of the Arab country back in 2003.
He said the government has asked security forces to discriminate between peaceful protesters and those seeking to wreak havoc.
Also on Tuesday, the Iraqi government on Tuesday issued a new package of measures to be undertaken in response to angry protests that have swept across the country.
The Council of Ministers, chaired by Abdul Mahdi, decided among the measures to be undertaken by the state to grant Minister of Oil Thamir Ghadhban the authority to approve the recruitment of graduates of oil training institutes for the year 2018-2019.
The council also agreed to reduce customs duty on plastic granules in order to facilitate the implementation of industrial projects.
Protesters in Iraq have directed their rage at a class of elite leaders, whom they accuse of pillaging the oil-rich country's wealth while the population grows poorer.
The protests, which began more than a month ago, have often turned violent, with Iraqi security forces opening fire and protesters torching government buildings.
Last week, President Barham Salih said Abdul Mahdi was willing to resign once political leaders agreed on a replacement. He also called for a new election law and said he would approve early parliamentary polls once it was enacted.