The current Covid wave “has peaked or is now peaking”, Ms Sturgeon said, but the decision was taken in line with a “very high level of infection and the pressure on the NHS”.
The law will be dropped in other settings, including shops and public transport, from April 18.
In both cases the law will be replaced by guidance advising the wearing of face coverings.
It comes amid record levels of Covid infection in Scotland, with most recent figures from the Office for National Statistics estimating one in 11 people had the virus.
The number of people in hospital with Covid has also reached record levels in recent weeks.
The Scottish Licensed Trade Association (SLTA) said it was “bitterly disappointed” by the First Minister’s decision.
“The lack of use of face coverings is already clearly evident in many settings and this extension of the restrictions will make little difference,” said managing director Colin Wilkinson. “We have already stated our view that Scotland not falling into line with England will confuse people – particularly visitors from south of the border. It is already confusing people and it is exceptionally unfair for business owners and their staff to have to remind people who are not familiar with our rules that they must wear a face covering.“To say we are bitterly disappointed by today’s announcement is an understatement as we still face nearly three more weeks of restrictions.”Ms Sturgeon told MSPs: “This phased approach strikes a sensible balance between our desire to remove this one remaining legal measure, and the common sense need for continued caution – not least for the sake of the NHS – while this wave of infection subsides.
“I recognise that face coverings are an inconvenience. However, given all the sacrifice of the past two years, and in view of the current pressure on the NHS, I believe the vast majority of people will accept that for a further two weeks this is a proportionate precautionary measure while we pass the peak of this latest wave.
“It also provides some further protection to those who are most at risk from the virus.”
