Palestinian boats working in the southern part of Gaza Strip started to fish as far as nine nautical miles off the coast, the first extension to the zone since 2005.
Previously, fishermen had been restricted to six nautical miles, the same distance that remains in place off the northern part of the Palestinian enclave which borders Israel.
Nizar Ayyash, chairman of the Gaza fishermen’s union, said between 200 and 300 ships went out on Sunday night, with most returning early Monday.
The Israeli Defence Ministry body responsible for implementing Israeli government policies in the Palestinian territories, COGAT, estimated that the extended zone could add NIS 400,000 (£74,000) a year to the Gazan economy.
The new nine-mile limit is patrolled by Israeli naval vessels and indicated by signs, and the extended distance means fishermen can catch more lucrative types of fish such as grouper.
Around 4,000 fishermen work in Gaza, more than half of whom live below the poverty line.
Israel has placed restrictions on movement from, and imports into, the Gaza Strip since 2007, after Hamas violently seized control of the area and then used imported materials to construct weapons and military infrastructure.
Despite security threats and unilaterally withdrawing from Gaza in 2005, Israel retains humanitarian responsibility to Gaza’s population and facilitates the flow of goods including food, medical supplies, educational and agricultural materials through its border into Gaza.