The tiny British territory on Spain's southern tip, which is home to some 32,000 people, depends on the small land border with Spain for much of its supplies and visitor flow.
Some 10,000 people also make the crossing to work daily from the Spanish region that surrounds Gibraltar called Campo de Gibraltar, and they fear that Madrid may make things more difficult at the frontier.
“There is no intention to close the border. The idea is that Spaniards who live in the Campo de Gibraltar and who work in Gibraltar continue to do so,” Spanish Foreign Minister Alfonso Dastis said in an interview published in daily newspaper El Pais.
Spanish dictator Francisco Franco closed the border with Gibraltar outright in 1969. Free travel between the two sides was only fully restored in 1985, ten years after his death.
Madrid's decision to relax its laws on the border was seen as part of its bid to gain support to enter the European Community, the precursor to the EU, which it achieved in 1986.
The territory has been under British-rule since 1713, when it was ceded in perpetuity under the Treaty of Utrecht following the War of the Spanish Succession.
Spain has long tried to reclaim Gibraltar. After Britain voted last year to leave the EU, Madrid proposed shared sovereignty over the territory, arguing this would allow the territory to remain in the bloc.
But Gibraltarians want to stay British, as demonstrated in 2002 when they rejected a referendum on shared sovereignty with Spain.