The Cabinet has agreed every county in Ireland will be moved to Level 3 Covid-19 restrictions with improved enforcement.
In doing so, the Government has rejected the National Public Health Emergency Team's recommendation to place the entire country under Level 5 restrictions.
An Taoiseach Micheál Martin made the announcement in recent minutes, saying: "If we all act now we can stop the need to go further."
"There has been a significant and serious rise in the number of cases," Mr Martin said. "We must respond and the challenge is to be as effective and proportionate as possible."
The higher level of restrictions will come into force at midnight tomorrow and will be in place for three weeks.
Addressing why the Government had decided against a more comprehensive lockdown, he said: "We have had detailed discussions since receiving NPHET'S recommendation to move straight to a level five lockdown.
"Central to our discussions has been looking at the wider implications of moving immediately to level five rather than realising the full potential impact of lower level restrictions.
"It's important to understand that we are in a very different situation to last March.
"Businesses are beginning to recover and vital public health services are still backlogged, severe restrictions now would have a very damaging impact, which those services and businesses may not be able to recover from.
"That said, the Government has decided to increase the level of controls in most of the country and to step up efforts to ensure compliance with guidelines.
"As part of this we have decided at this stage, not to move to a more comprehensive lockdown.
"It's important to understand that the potential implications of such a move are severe and very different from those we faced earlier this year.
"It could involve the loss of hundreds of thousands of jobs with these concentrated in families and communities, which are already experiencing difficulties."
Mr Martin also said it was clear most people were following the guidelines but 'some are taking a more lax attitude'.
"The virus is spreading because people are allowing it to spread," he said.
He appealed to a sense of community and said 'what happens next rests in our own hands'.
Commenting on the announcement Conor Healy, CEO of Cork Chamber said 'while not surprising, it is nonetheless challenging for business and society'.
“The impact of these tighter restrictions will be immensely challenging for those operating in food and beverage, hospitality or culture-based venues," he said. "Our economy and business community are in a highly vulnerable position now. A real push is now needed from all of society, to return to level two, and ensure we can resume meaningful economic activity for retail and hospitality before Christmas."
Mr Healy said Government must offer all assurances to afford businesses their best chance at forecasting the months ahead.
“The pressure of the imminent EU-UK withdrawal is now part of short-term business planning and the layering effect of this along with tightened restrictions could be the breaking point for many companies," he said. "We are calling on Government to give confidence in relation to business supports and to accelerate counter-cyclical investment in key projects such as CMATS to stimulate economic continuity.
"The real risk that our airport now faces must also be addressed through EU level travel agreement and financial supports.”