Iranian women will no longer be arrested for failing to comply with the Islamic dress code in place since the 1979 revolution, police in Tehran said.
"Those who do not observe the Islamic dress code will no longer be taken to detention centres, nor will judicial cases be filed against them," Tehran police chief General Hossein Rahimi was quoted as saying by the reformist Sharq newspaper.
But violators will instead be made to attend classes given by police, the semi-official Tasnim news agency said, noting repeat offenders could still be subject to legal action.
The dress code, which has been upheld for nearly 40 years, remains in place outside the capital.
The announcement signalled an easing of punishments as called for by the young and reform-minded Iranians who helped re-elect President Hassan Rouhani - a relative moderate - earlier this year.
But the country is still largely dominated by hard-liners, posing questions on whether the new rules would be fully implemented.
According to the dress code, women must cover their hair and wear long, loose garments, although it has slowly eased in recent years.
The announcement came just a week after authorities in Iran detained 230 young men and women at separate private party venues in Tehran over the involvement of music and alcohol.
Tehran police arrested 140 of the young party goers in a garden on the outskirts of Tehran and 90 in the city's uptown while dancing and drinking alcohol on Thursday night.
Police said they seized alcoholic beverages and psychotropic drugs during the raid.
Alcohol and gender mixing are banned under the country's strict moral laws, which were introduced after the 1979 revolution.
Crimes involving drug abuse, adultery and "spreading corruption" can land the accused with a death penalty in Iran. Lesser offences often result in fines, jail terms or lashes.