Merapi remains at the second-highest alert level, meaning the mountain is still dangerous, but the decision means that thousands of people living on its slopes who have fled their homes can return home, said Yousana Siagian, head of the Indonesian government's Vulcanology and Disaster Mitigation Center.
Villagers were jubilant at an evacuation center after hearing the government decision over a loudspeaker. Five one-ton trucks were loaded with people who headed back to their mountainside houses.
"It's a major burden released from our shoulders," said Suharno, chief of Turgo village. "We are ecstatic that the major threat is now over."
Three clouds of searing gas shot out from Merapi early Tuesday down the mountain about 1 kilometer (a half-mile), scientist Jilal said. Sixty bursts of red-hot lava were recorded. Still, that was an improvement over recent weeks.
"The number of hot clouds has decreased, and the volcano appears to have calmed down," said Jilal, who like many Indonesians goes by one name.
Merapi has been venting steam and debris since May 13. More than 20,000 people fled the mountain after a surge in activity shortly after a 6.2-magnitude earthquake rocked the area on May 28. In recent days, most men returned to tend to their farms and animals during the day, before going to government shelters at night.
"Now my life can return to normal," said Marjo Utomo, a survivor of the massive blast of gas and debris that killed more than 60 people in 1994 in Turgo village. Utomo suffered severe burns to 50 percent of his body during the firestorm.
A huge, superheated cloud, the largest this year, brought down a section of the Merapi's lava dome on Friday and created a new crater, relieving pressure on the dome, volcanologist Antonius Ratdomopurbo said Monday.