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In a normal year, more than a million UK tourists visit Portugal's Algarve coast
UK tourists will no longer need to quarantine after holidaying in Portugal, but travellers returning from Croatia will now have to self-isolate.
Transport Secretary Grant Shapps said people will need to self-isolate for 14 days on return from Croatia, Austria and Trinidad and Tobago.
The changes apply to anyone arriving after 04:00 BST on Saturday.
Meanwhile, the Scottish government has added Switzerland to the lists of countries on its quarantine list.
Portugal's ministry of foreign affairs welcomed the changes as "useful for all those who travel between Portgual and the United Kingdom".
In a tweet, it added: "This decision is proof of the good outcome of intense bilateral work. It allowed for an understanding that the situation in the country has always been under control, with Portugal standing as one of the European countries with more tests, fewer deaths and fewer hospitalisations."
The latest update to the quarantine list comes after thousands of British holidaymakers made a last-minute dash to get home from France last weekend, before quarantine measures came into force.
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It is thought around 20,000 British tourists are currently in Croatia.
The Department of Transport has advised people in Croatia, Trinidad and Tobago and Austria to follow local rules and check the Foreign Office website for further information.
In a statement, it urged employers to be "understanding of those returning from these destinations who now will need to self-isolate".
But pupils currently in those three countries who are due to start the new school year at the beginning of September could now find themselves affected by quarantine restrictions.
People who do not self-isolate when required can be fined up to £1,000 in England, Wales, and Northern Ireland. In Scotland the fine is £480, and up to £5,000 for persistent offenders.
BBC Balkans correspondent Guy De Launey said only a small number of direct flights from Croatia were due to reach the UK before the deadline of 04:00 BST on Saturday.
British Airways has one flight to Heathrow from Split, two from Dubrovnik and one from Zagreb.
Easyjet has one flight from Dubrovnik to Stansted, while Croatia Airlines has one flight from Zagreb to Heathrow.
The UK introduced the compulsory 14-day quarantine for arrivals from overseas in early June.
But the following month, the four UK nations unveiled lists of "travel corridors", detailing countries that were exempt from the rule.
Since then it has periodically updated that list, adding and removing countries based on their coronavirus infection rates and how they compare with the UK's.
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The UK provides the largest number of overseas tourists to Portugal, with more than two million tourists visiting every year.
The Algarve coast is the most popular destination, with 1.2 million visitors from the UK last year.
Travel expert Simon Calder tweeted: "A good time to book that late summer break, though fares are already soaring: Manchester-Faro for Saturday morning doubled from £50 to £98 in 30 minutes."
According to the Department for Transport, weekly coronavirus cases are on the rise in Croatia, Austria, Trinidad and Tobago as follows:
Croatia - 164% increase in weekly cases Trinidad and Tobago - 232% increase in weekly cases Austria - 93% increase in weekly casesHave you been affected by the new quarantine measures? Share your experiences by emailing haveyoursay@bbc.co.uk.
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