Cypriot banks are set to resume normal business operations though the capital control measures are expected to be in place for a longer period of time.
Foreign Minister Ioannis Kasoulides said that the curbs could remain in place for a month, contrary to earlier expectations that the restrictions would be lifted within days.
"A number of restrictions will be lifted and gradually, probably over a period of about a month according to the estimates of the central bank, the restrictions will be fully lifted," said Kasoulides, according to a Reuters report.
In an earlier statement, the ministry of finance said that the capital controls were necessary to "safeguard the stability of the system," which would be temporary and would be reviewed each day.
The bailed-out island nation imposed strict capital control measures that include a daily withdrawal limit of €300 ($385/£253), a €1000 ceiling on money transfers abroad, a ban on cashing of cheques and restrictions on credit card transactions to avert a run on deposits.
The tight rules were put in place in order to get a rescue package of €10bn from the "troika" of international lenders that include the European Union, the European Central Bank and the International Monetary Fund.
Cyprus is the first eurozone nation to impose capital controls and a levy on deposits above certain amounts as it has to raise €5.8bn to qualify for the bailout fund.
President Nicos Anastasiades praised the Cypriots for their "maturity and responsibility" as they waited patiently before the banks when they reopened for six hours. The branches were open at 10:00 GMT on Thursday, 28 March and were closed at 16:00 GMT.
Meanwhile, the president will cut back his salary by 25 percent while his cabinet ministers will take a 20 percent reduction, a presidential aide told AFP. The government has also appointed three ex-supreme court judges to look into the financial crisis.
The Cyprus stock exchange which has remained shut since 16 March will not be reopened until after Easter.