Video report by ITV News political correspondent Paul Brand
People from different households in Greater Manchester, parts of East Lancashire and parts of West Yorkshire are banned from meeting each other indoors from midnight, Health Secretary Matt Hancock announced.
In northern parts of England, an "increasing transmission" of Covid-19 had been identified and the government took "immediate action" to keep people safe.
Mr Hancock said "households gathering and not abiding by the social distancing rules" was a reason for the stricter rules.
"We take this action with a heavy heart but unfortunately it's necessary because we've seen that households meeting up and a lack of social distancing is one of the causes of the rising rate of coronavirus and we'll do whatever is necessary to keep the country safe," the Health Secretary said.
The same restrictions will also apply to Leicester, which saw the first so-called "local lockdown" imposed on June 29.
Although pubs, cafes, bars and restaurants can now re-open in Leicester and people can go on holiday with their own household, after the local lockdown was partially lifted.
What are the new restrictions?
No meeting other households at home or in a garden, apart from those in your support bubble
Households can go to pubs, bars and restaurants but NOT with another household
Police will have powers to enforce the new restrictions
Mr Hancock said the strict measures had to be introduced as people were not adhering to social distancing rules.
He said: "What we've seen is that one of the causes of this increase is households gathering together ignoring the social distancing rules so we're having to bring in firm action and say that two households cannot meet up indoors because that way we can help to stop the spread of the virus.
"And we've got to bring this in straight away because we can see those numbers increasing, we need to keep a control of this virus."
'We've got to bring this in straight away'
Mr Hancock tweeted that the government is "constantly looking at the latest data" on the spread of coronavirus, and "unfortunately we've seen an increasing rate of transmission in parts of Northern England".
The areas affected by the restrictions:
Blackburn with Darwen
Where do the new restrictions apply?
Mayor of Greater Manchester, Andy Burnham, said the restrictions will be reviewed weekly, but he agrees with the Health Secretary to introduce the "modest measures to bring down the rate of new infections."
"Over recent days, there has been a marked change in the picture across Greater Manchester with regard to the spread of Covid-19.," Mr Burham said.
"We have gone from a falling rate of cases in nearly all of our boroughs last week to a rising rate in nine out of 10 affecting communities across a much wider geography.
"In Rochdale, the one borough where cases have fallen, they are still too high. "
MP for Oldham, in Greater Manchester, and shadow transport minister Jim McMahon said there needs to be more clarity over what the government is doing to support those in areas affected by new restrictions.
He tweeted: "On the face of it, for Oldham borough residents this is the same restriction announced already this week, replicated in further areas.
"As well as publishing a list, I'm sure all of us would welcome the Government adding what more they will do to support us, jobs and our economy."
First Minister of Scotland Nicola Sturgeon said the decision to ban households in Greater Manchester, East Lancashire and West Yorkshire from meeting indoors is the "right" one.
She tweeted: "The UK government is right to act quickly if they think the situation warrants it.
"But this is a sharp reminder that the threat of this virus is still very real. Please abide by the all #FACTS advice and stay safe."