Residents of the Berchtesgadener Land district of Bavaria will not be able to leave home without a valid reason for two weeks from Tuesday, making it Germany's first area to go back into lockdown since April.
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The decision follows a spike in coronavirus cases in the district to 272.8 per 100,000 inhabitants over seven days.
"The restrictions on going out we have decided today will apply initially for 14 days," Bavarian Agriculture Minister Michaela Kaniber announced on Monday.
Under the measures, schools, restaurants, bars, theatres, gyms, cinemas and hotels will be closed. Church services will be allowed.
Berchtesgadener Land has a population of some 106,000.
While Germany's infection rates are lower than in much of Europe, they have been accelerating and hit a daily record of 7830 on Saturday, according to the Robert Koch Institute for infections diseases.
Chancellor Angela Merkel urged Germans to curb social contacts and keep travel to a minimum on Saturday after federal and state governments struggled to agree on how to contain a second wave of infections.
German leaders have been unable to agree on tougher measures to contain a second wave.
Courts in several regions have, meanwhile, overturned bans on hotel stays for visitors from infection hotspots.
Australian Associated Press