Households in Preston will be banned from mixing indoors or in gardens from midnight, while restrictions already imposed on other areas will remain in place.
Measures banning mixing between households were due for review on Thursday, a week after they were brought in for residents in Greater Manchester, parts of east Lancashire and West Yorkshire, as well as Leicester.
The Department of Health and Social Care confirmed on Friday evening that current rules on gatherings in those areas would not be lifted and that Preston would become the latest place to be included in a ban on households gathering in homes and gardens.
Local leaders in Preston warned on Thursday that it could face a Government intervention amid rising infection rates.
There were 61 new cases in Preston in the seven days to August 4, which is the equivalent of 42.6 cases per 100,000 people – up from 21.7 per 100,000 in the previous seven days.
At the request of the local authority, Preston will now be added to a watch list as an “area of intervention”.
The Government said guidance will make clear that people should not be gathering with other households anywhere indoors.
The restrictions on gatherings will be reviewed again next week, with any changes to be announced by Friday August 14.
Health Secretary Matt Hancock said: “The past week has been difficult for many people in Greater Manchester, West Yorkshire and east Lancashire, and I thank everyone in these areas for their patience and willingness to follow the rules.
“Yesterday I chaired a meeting of the Local Action Gold Committee, and unfortunately the data does not yet show a decrease in the transmission of this terrible virus.
“It means we must keep the current restrictions in place to allow more time for the impact of this ban on indoor gatherings to be felt, and make sure local residents and their loved ones are protected.
“At the request of the local area, we are also extending these restrictions to Preston.
“We are constantly examining the data on the prevalence of the virus in these areas, and we will review the measures again next week.
“As we continue to see rising rates of the virus across Europe, it is vital we take every precaution to protect our country.
“I urge everyone in these areas to follow the rules, get yourself a free test as soon as you get any symptoms, and isolate if NHS Test and Trace tells you to.”
But Liberal Democrat health spokeswoman Munira Wilson said the failure to set up a comprehensive test and trace programme was leaving local councils “blindfolded” while trying to stop the spread of the virus.
She added: “The Government must act now to reassure people in the Preston area that they are managing this serious outbreak.
“This is difficult when the Prime Minister has yet again brought in a regional lockdown without a press conference or any parliamentary scrutiny.
“Ministers have utterly failed to make sure we have a comprehensive test, trace and isolate system in place.
“This has left local authorities blindfolded whilst having to try and stop the spread of coronavirus in their communities.”
Adrian Phillips, chief executive at Preston City Council, said that while some wards have recorded a higher level of cases, it remains a “city-wide issue”.
He added: “The number of cases in Preston have increased rapidly in recent days leading to Government categorising the city as an area of intervention.
“It is also alarming to see that the under-30s are contracting it at a significant rate.”
Preston’s new restrictions mean that from midnight on Friday, residents cannot have others in their homes and gardens, cannot visit other people’s homes or gardens, even if they are in an unaffected area, and are not permitted to mix with other households in indoor venues.
Social bubbles are exempt from the restrictions, and residents can meet in groups of up to six – or more than six if exclusively from two households – in outdoor areas such as parks and beer gardens.
Households can also visit indoor hospitality venues, so long as they do not mix with others.
According to new estimates from the Office for National Statistics (ONS), an average of 3,700 people per day in private households in England were estimated to be newly infected with Covid-19 between July 27 and August 2, down slightly from 4,200 per day in the period July 20 to 26.
An average of 28,300 people in private households in England had Covid-19 between July 27 and August 2, according to the new estimates, equivalent of about 0.05% of the population, or one in 1,900 individuals.
The ONS said that while recent figures had suggested the percentage of individuals testing positive for Covid-19 had risen since the end of June, there is now evidence to suggest that this trend may have levelled off.
Meanwhile, quarantine measures were announced on Thursday evening for travellers arriving into the UK from Belgium, Andorra and The Bahamas – with Britons advised against all but essential travel to the three countries.
The restrictions – which mean those arriving will have to self-isolate for 14 days – came into force at midnight in Wales, with the same rules applying in England, Scotland and Northern Ireland from 4am on Saturday.
The Times reported France could be next to face restrictions due to rising infections in the country.
The French health authority – Sante Publique France – reported cases of Covid-19 are up by a third (33%) in the week to August 6, and infection rates are increasing in all age groups, particularly 20 to 30-year-olds.