Pubs and restaurants across Wales will be banned from selling alcohol and be forced to close at 6pm every evening.
The measure announced by first minister Mark Drakeford will come into force from 6pm this Friday.
Cinemas, bowling alleys, bingo halls and other indoor entertainment venues must also shut from the same date.
Mr Drakeford warned that without further measures, the number of people needing hospital treatment for COVID-19 in Wales could rise to 2,200 - and that there could be up to 1,700 avoidable deaths over winter "unless we act".
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Indoor attractions such as museums and galleries will also have to close, although outdoor visitor attractions can remain open.
The first minister said the number of infected people per 100,000 in the nation had grown from 187 on Friday to almost 210.
He warned that cases had continued to increase among under-25s.
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"More worryingly still, cases of coronavirus are beginning to rise in the over-60 age group," he added.
Mr Drakeford said the nation would look at travel restrictions in and out of Wales again after the lockdown in England ends, with another announcement to be made later this week.
He told the Welsh government's news briefing: "The measures we are taking are based on what the UK SAGE group of experts tells us has worked best elsewhere."
And, he added, the Welsh government will "provide the most generous package of financial assistance anywhere in the UK" to those affected by new restrictions.
Other national measures - such as household bubbles and how many people can meet in public indoor or outdoors - will remain the same.
The restrictions will be formally reviewed by 17 December and then every three weeks.
Mr Drakeford said he was "grateful" for what the hospitality industry had done and acknowledged that the new restrictions would be "difficult" because they come at one of the busiest times of the year.
"To support businesses affected by these new restrictions into the New Year, we will provide the most generous package of financial assistance anywhere in the UK," he said.
The package will include £180m specifically for tourism, leisure and hospitality business which is in addition to various support schemes available from the UK government.
