Bars smaller than 70 square metres (753 square feet), with no staff other than the owner, from a smoking ban introduced in July 2008, the Dutch government said on Wednesday.
"The exemption applies only for small bars with no personnel," a health ministry statement said.
"Every bar will have to put up a sign to alert customers whether or not it is a smoking establishment.
The smoking ban will remain unchanged for establishments like restaurants, bars with personnel, and discos, the statement said.
Health Minister Edith Schippers on Wednesday informed the lower house of parliament of the decision, which was in line with the governing agreement of the minority coalition between the Christian Democratic Action and the conservative liberal VVD.
Through the exemption, "consumers will get more freedom of choice and personnel will remain protected against tobacco smoke," said the minister.