Massachusetts will move into the third phase of its gradual plan to revive public activity on Monday, allowing gyms, museums, movie theaters and more to resume some operations even as COVID cases surge in other parts of the country.

Gov. Charlie Baker, Lt. Gov. Karyn Polito and members of the cabinet unveiled plans Thursday to transition into the next stage of reopening after the holiday weekend, touting positive public health metrics in the state and urging people to continue to abide by social distancing, face-covering and hygiene practices.

"The public health data makes clear that Massachusetts is effectively bringing the fight to the virus as we've reopened," Baker said.

Before announcing his decision, Baker noted that Wednesday's daily report included 261 people who had newly tested positive for the virus, 753 patients hospitalized for COVID-19, and a 1.8 percent positive test rate.

Businesses that return in Phase 3 must follow safety restrictions, including limits on capacity. The phase will "last significantly longer than the other phases," Baker said, and will be broken into two smaller steps.

As the next phase begins, the administration will also update restrictions on gatherings to allow more people to congregate. Indoor gatherings will be capped at eight people per 1,000 square feet with a maximum of 25, while outdoor enclosed gatherings will be limited to 25 percent of permitted capacity with a maximum of 100.

Caps do not apply to unenclosed outdoor events, such as backyard parties or park visits.

The decision comes as New York and New Jersey pump the brakes on their own progress toward reopening due to record numbers of new infections reported across the country concentrated in southern and western states.