The UK terrorism threat level has been reduced from critical to severe, Prime Minister Theresa May has said.
The change indicates an attack is highly likely, not imminently expected.
Soldiers deployed to support the police will be stood down on Monday night, at the close of the bank holiday weekend.
Earlier on Saturday, police evacuated an area of Moss Side in the city, in a search linked to Monday’s bomb attack at the Manchester Arena which killed 22 people and left scores injured.
The evacuation was described by Greater Manchester Police as a precautionary measure to “ensure everyone’s safety”.
Mrs May made the announcement after leading a meeting of the government’s emergency committee Cobra on Saturday morning.
She said significant activity by the police during the last 24 hours had led to the threat being reduced.
It had been set at critical in the aftermath of the bombing.
There will be “more arrests and more searches” linked to the Manchester attack, the UK’s most senior counter-terror officer Mark Rowley has said.
Greater Manchester Police said the change in threat level had not altered its response to Monday’s attack.
Chief Constable Ian Hopkins said: “The level of resources we have available to us remains the same as we continue to take positive action.”
Detectives are questioning 11 men about the attack following a series of raids.
In the latest arrests, police held two men, aged 20 and 22, after carrying out a controlled explosion at an address in the Cheetham Hill area of Manchester early on Saturday.
There were also searches at a separate property in Cheetham Hill and in the Longsight area.
Police reviewed security at more than 1,300 events across the country, and say people can be “100% confident” they are doing everything possible to protect them.
Senior officers have encouraged people to go out but to remain vigilant.
“Whatever events you are going to – whether you are going shopping or to sporting events or music events, I’d encourage the public to carry on,” Metropolitan Police Assistant Commissioner Mark Rowley said.
“What they will see is many more police officers – some armed, some unarmed – out there to protect the public.”
Newsbeat’s Steve Holden said security had been stepped up at Europe’s biggest free-ticketed event, where 25,000 people are expected on Saturday, and on Sunday.
There are more police officers, sniffer dogs, and two-stage security in place, with checks at transport hubs as well as “airport-style security” at the venue.
“The advice is not to bring big bags, things like umbrellas and big coats,” he said.
Most people were still excited to come, he said, but a “smattering” had been put off after the arena blast.
Seven children were among those who died when Salman Abedi, 22, detonated a bomb at the Manchester Arena on Monday night, at the end of a concert by US singer Ariana Grande.
NHS England said 116 people had received inpatient care, with 63 still in hospital – including 20 in critical care.