Melbourne's Thornbury Picture House is finally permitted to sell every seat in the house, after the Victorian government allowed entertainment venues to run at 100 per cent capacity.
The cinema's owner Gus Berger told AAP the relaxed rules are the difference between running at a loss and turning a profit at his 60-seat venue.
"We've been losing money every night since we reopened under COVID restrictions ... this will make a really big difference for us," he said.
The Victorian government lifted restrictions on venues with fewer than 1000 seats at midnight on Friday.
It's the first time in about a year venues have been allowed to run at full capacity.
Under the relaxed rules, venues with a capacity of less than 1000 can fill every seat, while bigger venues must apply for consideration under the state's rules for public events.
This will apply to theatres, cinemas, music halls, concert halls, auditoriums, galleries, museums and sports facilities.
Cinemas were one of the first industries to shut down when COVID hit, and were one of the last to reopen.
Mr Berger said the cinema resorted to selling takeaway popcorn and choc tops on Saturday nights during the year of COVID restrictions.
"2020 was a shocker for us, as it was for many," he said.
"We do hope people will have the confidence to come back to cinemas."
The state government says a "density quotient" of one person for every two square metres will still apply in areas such as lobbies, and people will still have to "check in".
"Designated empty chairs at these venues can now be filled - and that's a big moment for operators who will be able to run at 100 per cent seated capacity," Health Minister Martin Foley said on Friday.
Australian Associated Press