Pubs, restaurants, shops and other businesses hit hardest by the coronavirus pandemic will be boosted by a £5 billion grant scheme to help them reopen as the lockdown is eased.

Chancellor Rishi Sunak will announce the “restart grants” worth up to £6,000 per premises to help non-essential retailers reopen and trade safely at his Budget on Wednesday.

Hospitality, hotels, gyms, as well as personal care and leisure firms, will be eligible for up to £18,000 per premises as they are due to open later under the plans for easing lockdown.

The Treasury estimates 230,000 firms will be eligible for the higher band, which will be awarded based on their rateable value, and 450,000 shops will also be able to apply.

The £5 billion is targeted at England, but the devolved nations in Scotland, Wales and Northern Ireland will receive an extra £794 million in funding through the Barnett formula.

Mr Sunak said: “Our local businesses have been hit hard by the pandemic which is why we went big and went early with a multibillion-pound package of support.

“There’s now light at the end of the tunnel and this £5 billion of extra cash grants will ensure our high street can open their doors with optimism.”

Local authorities will be tasked with distributing the grants and will receive the funding in April.

The UKHospitality trade body welcomed the plan, saying many firms are “struggling to see how they could survive through” Boris Johnson’s road map for reopening, with laws on social distancing set to continue until at least June 21 – the earliest date when nightclubs will be considered for reopening.

Chief executive Kate Nicholls said: “Cash reserves have been severely depleted after a year of closure and restrictions and these grants are a very welcome boost, putting the sector in a better place to restart.

“Businesses are crying out for the cash now so there can be no further delays which might make it too late for some.”

But she said the grants must form part of a wider package that includes an extension to the reduced VAT rate and a business rates holiday.

“Without these measures, and full furlough while we re-open, the hospitality sector’s recovery will be stunted along with our ability to start tackling unemployment by creating jobs,” she added.

The British Retail Consortium (BRC) joined UKHospitality in calling for clarity on whether the grants will be subject to state aid caps mirroring the EU’s, but welcomed the funding as “a vital injection of funding during this extremely challenging period”.

BRC chief executive Helen Dickinson did, however, warn that the grants “will only provide temporary relief” and called for an extension to the moratorium on aggressive rent enforcement and to the business rates relief in the Budget.

Federation of Small Businesses national chair Mike Cherry said the grants will “provide a much-needed lifeline”, but called for the Chancellor to set out more funding “for those that have been excluded from income support throughout this crisis”.