Partygoers poured into Busters - part of The Hive complex - where all dance floors were re-opened at the stoke of midnight wjhen almost all Covid-19 restrictions in England were eased.
Matthew Dickinson, spokesman for the Hive, said he was delighted to finally be able to welcome customers back - but understood with rising coronavirus cases there were still many people who might be nervous about going out.
"The fact we are now the biggest venue in the Midlands is a saving grace because we have the space to be able to set aside our Gilly's Bar, where there will still be social-distancing in place as a solution for those who remain fearful," he said.
"We are ready to go forward with Covid passports and are closely monitoring government guidelines and welcome practical and workable solutions to keeping infection rates down
"But it is important that we are able open now as there is massive investment at the complex this year.
"We have opened five of our clubs and bars - and there are four more to open in the coming months, including a Supercar VIP Lounge and Ice Bar Experience.
"We need to get back to some sort of normality."
There is also caution in other parts of the town as what is being described as a 'pingdemic' begins with more people getting track and trace notifications on their mobile phones.
One business affected has been Harry Ramsbottoms fish and chips on Grand Parade which was forced to close.
Owner Vic Fox, who supported the community through the pandemic with discounted fish and chips, explained: "I closed to get all my staff tested as so many people are coming in refusing to wear masks.
"I just thought it was a safe thing to do and they are all negative.
"Freedom Day does concern me as people are stupid and now the night clubs are opening I think it will be a free for all - it will be like a New Year's Eve party every Friday and Saturday night."
This weekend saw 1,538 new cases of coronavirus in Lincolnshire, but no COVID-related deaths were reported.
East Lindsey District Council leader Coun Craig Leyland predicted the lifting of restrictions would not be easy. He said: "It all changes - people have options about whether to wear masks or not and I think there might be some challenge about people who don't wear facemasks in crowded conditions.
"I think people need to be respectful of everyone's opinions on this.
"I know businesses are nervous about how this can be handled. There's no legislation now. It's just people being responsible for themselves.
"It's not going to be easy - I hope it works out well.
"We've been a long time dealing with Covid and certainly the economy needs to come out of it."