Millions of people in London, Essex, York and other areas face tougher Tier 2 Covid measures from Saturday, Health Secretary Matt Hancock has said.
Under this "high" alert level, there is a ban on households mixing indoors, including in pubs and restaurants.
Greater Manchester mayor Andy Burnham is resisting the region moving to Tier 3, ahead of a final decision on this.
More than half of England's population will now be living under high or very high-alert restrictions.
The areas to go into high alert restrictions this weekend are: London, Essex (apart from Southend and Thurrock), York, North East Derbyshire, Chesterfield, Erewash in Derbyshire, Elmbridge in Surrey, and Barrow in Furness, Cumbria.
As unitary authorities, Southend and Thurrock councils are not included in the move and will remain in Tier 1, Essex County Council has said.
The health secretary said "things will get worse before they get better".
"Now, I know that these measures are not easy but I also know that they are vital," Mr Hancock told MPs.
"Responding to this unprecedented pandemic requires difficult choices, some of the most difficult choices any government has to make in peacetime."
On Thursday, a further 18,980 cases and 138 deaths within 28 days of a positive test were reported in the UK.
The new three-tier system sees every area of England classed as being on medium, high or very high alert - also known as Tiers 1 to 3, respectively.
It came into effect on Wednesday, and the Liverpool City Region remains the only area currently in the highest tier.
Meanwhile, the government announced that travellers returning to the UK from Italy, Vatican City and San Marino must self-isolate for 14 days from 04:00 BST on Sunday.
Discussions are continuing over whether Greater Manchester will be moved into the highest tier of restrictions, with a financial support package yet to be finalised.
Speaking at a press conference on Thursday, Mr Burnham said the region's leaders were "unanimously opposed" to the introduction of Tier 3 measures, calling the government's plans "flawed and unfair".
He said: "They are asking us to gamble our residents' jobs, homes and businesses and a large chunk of our economy on a strategy that their own experts tell them might not work."
Repeating his calls for a financial support package for parts of the North West, he added: "Greater Manchester, the Liverpool City Region and Lancashire are being set up as the canaries in the coalmine for an experimental regional lockdown strategy as an attempt to prevent the expense of what is truly needed.
"The very least they should be offering the people of Greater Manchester who will be affected by these closures is a full and fair 80% furlough for all affected workers, 80% income support for people who are self-employed and a proper compensation scheme for businesses."
Tier 3 involves pub closures and a ban on household mixing indoors, in private gardens and in most outdoor hospitality venues and ticketed events.
Mr Hancock confirmed in the Commons that no decision had been made on moving more regions to Tier 3, but added "we need to make rapid progress".
Meanwhile, the NHS Test and Trace system in England recorded its worst week for reaching community contacts since the middle of June.
Data showed some 62% of non-household contacts of people who tested positive in the community were reached through the system in the week ending 7 October.
This is the lowest success rate since 24 June, down from 67% last week.
Asked about the latest data, the PM's spokesman said tests were being provided on an "unprecedented scale" and No 10 was still working to raise capacity to 500,000 tests a day by the end of the month.
Labour leader Sir Keir Starmer has defended his call for a nationwide "circuit-breaker" - a short limited lockdown - to stem rising infection rates, saying "no region will be immune" from Covid-19.
Speaking to the BBC, he said the alternative was "weeks and months of prolonged agony" in a tiered system.
Shadow health secretary Jonathan Ashworth told MPs in the Commons that a full national lockdown "stretching for weeks and weeks" would "be disastrous for society", but that a lockdown of between two and three weeks could help "take back control of the virus".
Speaking on BBC Radio 4's World at One, Chris Hopson, chief executive of NHS providers, said he also favoured this move to ensure the NHS is not overwhelmed by Covid-19 cases.
Meanwhile, Labour mayor Sadiq Khan told London's City Hall there was "simply no other option" than introducing the new restrictions.
He said he will continue to press the government for more financial support, but added that "we've got a difficult winter ahead".
Concerns have been raised about the impact the restrictions will have on businesses, particularly in the hospitality sector.
London has 3,640 pubs and 7,556 restaurants, according to real estate adviser Altus Group, but they will not be eligible for government support available to premises which have been ordered to close.
The British Beer and Pub Association (BBPA), the trade association for Britain's brewing and pub sector, said Tier 2 restrictions without a "proper package of support" would "decimate" pubs.
Emma McClarkin, BBPA chief executive, said pubs were already struggling due to the current restrictions, with the new measures leaving "most pubs fighting for their very survival".
Nickie Aiken, Tory MP for the Cities of London and Westminster, urged the government to set out an "exit plan" for ensuring London is placed back into Tier 1.
She said she remained "deeply concerned about the impact further lockdown will have on the capital's hospitality, leisure and retail businesses".
Robert Halfon, Conservative MP for Harlow in Essex, said he welcomed Tier 2 measures for the county but would call on Chancellor Rishi Sunak to prevent businesses suffering financially.
Liverpool is considering a two-week half-term break for schools as part of its "battle with Covid-19".
Under the plan, backed by a teaching union, pupils would be taught remotely at home for the second week of the break.