The move means bars, cafes, restaurants and cinemas will be shut. Supermarkets and pharmacies will remain open, Ardern said, adding that the country was well supplied. All schools will be closed from Tuesday (March 24).
"We will move to alert level 3 nationwide. After 48 hours, the time required to ensure essential services are in place, we will move to level four. These decisions will place the most significant restrictions on New Zealanders movements in modern history," Ardern told the press.
She added: "Schools will be closed from tomorrow, except to the children of essential workers such as doctors, nurses, ambulance drivers, police and there will be others on that list. This will give them time to plan, but it will be temporary. Schools will close entirely from midnight on Wednesday."
Finance Minister Grant Robertson announced added economic measures, including a freeze on rent increases, an increase to the wage subsidy scheme announced last week and support for mortgage holders.
New Zealand experienced a rise of 36 confirmed cases on Monday, bringing the country's total to 102.