The Grease star was spotted emerging from her home near Santa Barbara around lunch time on Wednesday with her husband John Easterling.
The couple went for lunch at the Brothers Restaurant at the Red Barn where they enjoyed a leisurely hour-long meal.
The pair were spotted eating at the bar while watching tv with Olivia being overheard as saying "Go on then!" when she was asked if she wanted to try out the warm chocolate truffle cake.
During their lunch, Olivia and John also reportedly chatted about how they spent Christmas and New Years. Afterwards, they completed a few chores including getting groceries and petrol.
At one stage, Olivia sat in the SUV and applied some lipstick while talking on her mobile phone.
This outing comes as rumours swirled around recently speculating that she only had a few weeks left to live and was "clinging to life".
Olivia was diagnosed with breast cancer in 2017 and took to Facebook to address the rumours saying they have been greatly exaggerated and that she wishes everyone a Happy New Year.
