The order had been in place since March in an effort to mitigate the spread of the coronavirus.
Murphy said he is also signing an executive order to raise the limit on outdoor gatherings.
Effective immediately, Murphy said indoor gatherings will be permitted at whichever number is lower: 25% of a building's capacity or 50 people total.
He said there's no requirement to reopen.
"No one should reopen unless and until they feel fully confident in their ability to do so," Murphy said.
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Murphy reported there were 375 new cases overnight, bringing the total to 165,000. The death rose by 91 over the same period for a total of 12,303 recorded fatalities from the virus, Murphy said.
Meanwhile, the limit on outdoor gatherings will be raised to 100 people immediately.
Murphy said he expects that limit to be raised to 250 people on June 22 and 500 people by July 3.
"School districts planning graduations should prepare for a 500-person limit to be in place by the time graduations can resume on July 6," Murphy said.
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The decision comes a day after Murphy was criticized by political opponents for attending rallies over the weekend, apparently in violation of his own executive order limiting gatherings to 25 people or fewer.
GUIDANCE FOR POOLS
Murphy's executive order also authorizes the opening of pools on June 22, and the opening of all outdoor and recreational businesses except for amusement parks, water parks and arcades.
Guidance was also given for New Jersey pools and swims clubs that want to reopen.
That guidance includes: limiting capacity to 50%; guests and staff must sign in to help with contact tracing; and no pool toys, kickboards or snorkel gear.
We found people ready to take a dip.
"Mostly because it'll give the children an outlet and the people who use the pool an outlet," said Joy Hopkins of Willingboro.
Others say they won't be going.
"It's not like last summer. I really enjoyed last summer but now I'm taking precaution because of the pandemic," said Patricia Oliver-Smith of Willingboro.
Willingboro Township recreation officials are still in talks about how and if the two public pools will reopen this summer.
"We still have to look at whether or not that's going to let us be fiscally responsible to the taxpayers and residents. And one of our priorities is to make sure that everybody stays safe and healthy," said Parks and Recreation Director Jill Cyrus.
Trenton officials say their pools will likely open around mid-July.
"They've been cooped up for the last couple of months and recreation and pools are an important strategy in keeping them having things to do during the summer months," said Mayor Reed Gusciora.
The local officials say just because pools are allowed to open on June 22 doesn't necessarily mean they'll be ready to go on that date.
Both Trenton and Willingboro say it will take at least a few weeks to figure out the new procedures.
The Associated Press contributed to this report