West Yorkshire is to be placed under tier three Covid restrictions from Monday, the strictest level of rules.
The area - home to an estimated 2.3 million people - includes the cities of Leeds and Bradford.
The government has promised a further financial package of more than £59.3m for the region.
Casinos, soft play, adult gaming centres, betting shops and car boot sales will be shut, as well as pubs and bars not serving substantial meals.
Under the tier three - very high alert - rules, there can also be no mixing of households indoors or outdoors, including in private gardens.
It comes as a major study of Covid-19 in England suggested that Yorkshire and the Humber, where one in every 37 people has the virus and includes West Yorkshire, is the country's worst affected area, followed by the North West region.
When West Yorkshire goes into tier three from 00:01 GMT on 2 November, 11 million people - nearly a fifth of all those living in England - will be under the tightest coronavirus restrictions.
A statement from the Leaders of West Yorkshire Councils said they accepted the move into tier three "with great reluctance".
"The virus spread is now at a critical juncture. Not only are infections rising in our region, particularly amongst the elderly, but we already have evidence that the NHS is starting to struggle to deliver essential elective care," it continued.
Bradford currently has the highest Covid rates in the county, with 483.5 cases per 100,000 of the population in the week to 24 October.
Susan Hinchcliffe, leader of Bradford council and chair of the West Yorkshire combined authority, warned that "further economic restrictions" would be "damaging" for businesses and jobs.
She accused the government of "seriously underestimating the economic impact" of restrictions and vowed that local leaders would "challenge" it to "improve upon them".
Julian Hartley, chief executive of Leeds Teaching Hospitals NHS Trust, said Leeds hospitals had "exceeded the peak position we were in earlier this year in April".
Hospitals in the city are currently treating 268 patients with Covid - up from 158 last week.
The neighbouring areas of South Yorkshire, Greater Manchester and Lancashire are already under tier three restrictions, as well as the Liverpool City Region and Warrington. Nottinghamshire goes into tier three from Friday.
The government's financial package is in addition to the business grant arrangements previously announced by the Chancellor when the area was place under tier two rules.
Council leaders said the package could be broken down into two per-head figures:
- A one-off additional amount of £20 per head: for West Yorkshire - estimated to be worth £46.6m in additional funding
- A total of £8 per head to support enhanced test and trace and contain measures, resulting in an additional £12.7m
They said they had been promised further conversations with government ministers to discuss local schemes "to build on and continue to support the economic recovery of the region".
West Yorkshire is made up of five council areas - Calderdale, Bradford, Kirklees, Leeds and Wakefield.
Residents are advised to avoid travelling outside the area, unless for essential journeys, such as work or caring responsibilities.
Gyms may continue to open, but the guidance is against indoor exercise classes taking place.
Victoria Eaton, Director of Public Health for Leeds, said the rate of infection in Leeds was "still growing in Leeds though not as steeply as the increase in other areas, both in West Yorkshire and in Yorkshire and Humber".
She said the latest daily rate was 416.7 per 100,000. The rate of infection is now highest among 30-44 year olds but "most worryingly we are seeing increases among our over 65 age group, which as we know is an early warning of future hospital admissions".
Judith Blake, Leeds City Council leader, said: "This is obviously a very difficult decision for anyone to take. We realise the significance of the economic impact that this will have but we're very mindful of the fact the virus is at a state where we need to take measures, particularly with regard to our hospital admissions."
In other key developments:
- The UK reported another 23,065 cases of coronavirus on Thursday, and a further 280 deaths, bringing the total death toll to 45,955
- Nearly 100,000 people are catching coronavirus every day in England, with the number of positive cases doubling every nine days, the React-1 study by Imperial College London suggests
- Millions more people in areas of Yorkshire and the Humber, parts of the West and East Midlands, as well as Luton and Oxford City will move to tier two restrictions from Saturday
- First Minister Nicola Sturgeon earlier unveiled Scotland's new five-tier Covid measures, which will come into force from 06:00 on Monday of next week, but has not ruled out another national lockdown
- The number of patients in hospital with coronavirus in Wales continues to increase - up nearly a quarter on last week. Latest NHS Wales figures show 1,110 Covid-19 patients currently in hospital beds - more than 80% of the level at the pandemic's peak in April
- Travellers returning to the UK from Cyprus and Lithuania from 04:00 GMT on Sunday must self-isolate for two weeks, the transport secretary has said
- HALLOWEEN AT HOME?: Four frighteningly good ways to get involved this year
- BBC IPLAYER EXCLUSIVE: Would you like a sneak peek at the new series of His Dark Materials?