Community leaders have criticised the timing of the announcement and the decision to scrap mandatory mask wearing, accusing the government of 'no longer following the science' to distract from recent bad press.
And the city's director of public health, Helen Atkinson, said she did not wish to 'undermine' efforts to tackle the virus by abandoning all measures to control its spread.
She said there were ongoing outbreaks in almost half of all care homes in the city and that cases had risen 'significantly' in schools over the last two weeks.
'I think it's important to recognise that this pandemic isn't over,' she said at the meeting of the health overview and scrutiny panel on Thursday. 'We are moving from Plan B to Plan A next week which means it becomes choice rather than guidance so it's really about encouraging people to still be as safe as they can.
'Although the government's guidance has changed, we will continue our cautious approach.'She said schools will be encouraged to use of masks 'in outbreak situations' and urged people to take tests before visiting vulnerable people.
The changes announced by prime minister Boris Johnson on Wednesday will see the rules on mandatory face coverings and Covid passports dropped from Thursday.
However, health secretary Sajid Javid said the move was 'not the end' and urged people to continue infection prevention measures and to self-isolate after testing positive.
This has been echoed by business and council chiefs in the city.
Jenni Catlow, the owner of Tango Tea in Southsea and chairwoman of Albert Road Traders' Association, said 'now was not the time for people to let their guard down'.
'We are still going to ask people to wear masks, as are many other businesses in Albert Road,' she said. 'Customers still want to wear them and most are still wary of Covid; it's still here and case numbers are still very high in Portsmouth.'
City council leader Gerald Vernon-Jackson said there was still a need for people to be 'careful' with the virus still circulating.
‘We’re still getting people dying every week - there were three last week in Portsmouth,' he said. 'It's a serious disease. We have never had infection rates this high.’
The Lib Dem leader also hit out at politicians in Westminster who had tried to downplay the severity of the virus.
'The likelihood is that cases will come down but they are still very high,' he added. 'Omicron might be less serious than previous variants but it is still very serious. People are still dying of it.'
Criticism has also been levelled at the government by Pompey Pensioners for the timing of the announcement.
Steve Bonner, its chairman, said the move was 'a distraction' from the negative publicity around the 'partygate' scandal.
'Wales and Scotland have got it right by keeping the requirement for masks,' he said. 'This government is no longer following the science in England and this is purely to deflect from recent events.
'Good sense dictates that you wear a mask and Pompey Pensioners will certainly continue to do so.'
Covid pressures at Queen Alexandra Hospital have eased in recent weeks, according to medical chiefs, although new data shows its beds occupancy rate has been above 95 per cent for at least the past six weeks. On January 14, every single bed in the hospital was taken.
Medical director John Knighton said the number of patients with the virus was 'relatively modest' compared to last winter but that the number of cases in the city increased the risk of 'asymptomatic carriers' visiting and spreading it to people there for other reasons.
'The operational impact of having to isolate people because they've been in contact is a real challenge for us,' he said at Thursday's meeting. 'And the higher the level of prevalence of Covid in the community, of course the greater that risk.'
He said it was 'a really difficult scenario' and that it had prompted the request for all visitors to do a test before entering the hospital.
Chief operating officer Chris Evans said staffing pressures had also started to ease with now only about five per cent of its workforce off due to illness of any kind.
He said that figure was 'quite a lot lower than a few weeks ago' but still had a 'significant' impact.