The newly-formed Dutch government plans to lift the ban on smoking in certain cafes and bars.
The ban, introduced two years ago by the previous administration will no longer apply to pubs bars smaller than 70 square metres (753 square feet), and which employ no staff other than the owner.
"The exemption applies only for small bars with no personnel," a health ministry statement said.
"Every bar will have to put up a sign to alert customers whether or not it is a smoking establishment."
Small cafe owners had complained that, as a result of the ban, their profits had plunged and many faced closure. Many did not have the space or the money to install separate smoking areas.
The smoking ban will remain unchanged for establishments like restaurants, bars with personnel, and discos, the statement said.
Health Minister Edith Schipperstold told parliament of the decision, which was in line with the governing agreement of a new, rightist coalition.
The decision must still be approved by parliament, where the minority coalition of the Christian Democratic Action (CDA) and the conservative liberal VVD enjoys the backing of the Party for Freedom of anti-Islam MP Geert Wilders.
All three parties, which together have a one-seat majority in the lower house of parliament, support the measure.
It would also be referred to the Council of State, which advises the government on legislation.
Earlier this year, statistics from the Food and Consumer Product Safety Authority (VWA), a government body, showed that about 41 percent of Dutch bars and discos were transgressing the law.
The Netherlands has more than 5,500 bars, about 3,000 of them staffed by the owner alone.
Shortly after the ban was introduced, bar owners formed resistance groups collecting money to help one another pay the fines and legal costs for defying the ban.
Two different courts ruled last year that the ban unfairly discriminated against small, one-person operations.
But those rulings were annulled, and appeals judges in June this year upheld the ban's general applicability.