Belgium was placed on high alert after the Paris November 2015 attacks, and again in March 2016 after jihadists bombed Brussels airport and a metro station, killing 32 people.
Mr Michel said the country’s OCAM national crisis centre had reduced the threat level from three to two on a maximum scale of four.
He said: “The national security council has been informed of the official communication of the lowering of the threat level from three to two.”
The Belgian premier said ‘level two’ had evolved since 2015, saying that a reinforced security culture had been created in the wake of the Paris killings.
Scores were killed or injured in the coordinated assaults, which were carried out by Islamic State (ISIS) jihadists – many Belgian-born – in November 2015.
Mr Michel’s spokesperson Frederic Cauderlier, for his part, told the AFP news agency that troops who have been patrolling Belgium’s streets since 2015 would still protect sensitive sites, such as nuclear power stations and places of worship, including churches and synagogues.
And Mr Cauderlier said soldiers will also be deployed at major gatherings, namely big sporting events.
The threat level has hovered between three and four since January 2015, after Belgian police smashed a terror cell based in the town of Verviers that was planning an attack on police.
Level three means that a terrorist attack on home soil is “possible and likely,” while level four means an attack is “imminent”.
After the Paris attacks, and again after the suicide attacks on Brussels airport and a metro station in March 2016, the threat level was maintained.
The Verviers cell had links to Abdelhamid Abaaoud, the Paris mastermind, who also had links to the Brussels bombers.