The state mandate had required masks to be worn inside businesses where vaccination status was not being checked.
The mandate will remain in effect at homeless shelters, healthcare centers, state-run nursing homes, correctional facilities, schools and day cares.
"We saw it coming, it happened, we hit our peak on January 7, but now we've noticed a 93% drop in cases," Hochul said. "That is exactly what we've been waiting for."
The governor said indoor mask requirements would now be left to cities, towns and businesses across the state.
"This is your prerogative," Hochul said.
New York City will maintain its citywide mandates that require proof of vaccination to enter restaurants, theaters and arenas.
"We are continuing to follow the science and the guidance of public health professionals to keep New Yorkers safe," said Fabien Levy, a spokesman for Mayor Eric Adams. "We encourage all New Yorkers to continue to wear high-quality masks when indoors or in crowded spaces and to get vaccinated and boosted to stop the spread."
Hochul declined to lift the state's school mask requirement, citing the vaccination rate among 5-to 11-year-olds.
"We have a little more work to do with the younger kids," Hochul said. "I think we can do better."
NYC's Department of Education has also established mask requirements in its plan for the current school year that remain in effect. Masks continue to be required on mass transit, and in health care, congregate care, and childcare settings as well. Additionally, any private business can choose to require that employees, patrons, and other visitors wear masks when entering their businesses.
WATCH | Dr. Matt Harris on mask mandates
The state currently has 4,600 hospitalizations, down 63% from the peak. Hochul noted that hospitals are still quite full, but thanks to help by the National Guard, most hospitals have at least 20% capacity available.
She added that she would like to see more children and young people vaccinated. So far, 70% of teens fully vaccinated in the state, but just 38.8% of kids ages 5-11 have gotten their first dose.
While Connecticut and New Jersey are already among a handful of states with plans to ease mask mandates in schools, Governor Hochul indicated New York could reassess the mandate in March at the earliest.
Critics have repeatedly called for the mandate to end both in business and schools.
"What this does, is it continues to frustrate and aggravate parents," said Nassau County Executive Bruce Blakeman. "I have asked the governor over 25 times in public to show residents the science and metrics used to keep the school mask mandate in place. We have still not received an answer. Parents know their children best, and should be able to make decisions about what is best for them."
The governor said that with the state's children going on a week-long break starting February 21, she wants to make sure kids are safe.
She wants kids take a provided at-home COVID test before going back to school and then again three days later.
The state plans to look at the positivity rate in the schools and within the state, including hospital admissions.
UFT President Michael Mulgrew released the following statement:
"We are all excited about the possibility of lifting these restrictions, but Governor Hochul's thoughtful and prudent approach is the right one."
ALSO READ | New York couple charged with conspiring to launder billions in cryptocurrency
* Get Eyewitness News Delivered
* Follow us on YouTube
* More local news
* Send us a news tip
* Download the abc7NY app for breaking news alerts Submit a News Tip