German Chancellor Angela Merkel has agreed to gradually ease virus curbs in Europe's top economy, caving to political pressure and public discontent seven months before a general election.

After more than nine hours of talks, Merkel and Germany's 16 regional leaders unveiled a step-by-step plan to relax restrictions after months of shutdowns, despite concern over the spread of new and more aggressive virus variants.

Merkel said the loosening of restrictions, tied to strict conditions, was justified because of the imminent ramp-up in vaccinations and the arrival of mass rapid testing.

“Today, we can talk of hope and a transition to a new phase” in the fight against the pandemic, the veteran chancellor was quoted as saying by AFP.