Its neighboring state, the state of Mexico, will also impose the measures, which include the suspension of all nonessential activity between December 19 and January 10, 2021.
Hospitals in the area are nearly at 75% capacity and officials are scrambling to contain the surge in infection.
"We are now at the levels we were in during the highest moment (of the pandemic) in June," said Alfredo Del Mazo, the governor of the state of Mexico.
Mexico City has a population of roughly 9 million but that increases to 21.7 million people when including the larger metropolitan region.
Meanwhile, Mexico City Mayor Claudia Sheinbaum called on all citizens to obey restrictions. She has called for an "extraordinary effort so that anyone who is seriously ill can always have a bed in a hospital."
Sheinbaum herself was diagnosed with the virus in October.
As of Thursday evening, Mexico has reported 1.2 million confirmed Covid-19 cases and 116,487 confirmed deaths, according to Johns Hopkins University.
The country has experienced a particularly harrowing fall. Though Mexico has never really gotten its virus outbreak under control, newly confirmed cases and deaths had largely plateaued by the summer. By October, officials were warning that the virus was surging once again.
Mexico City and the state of Mexico have now both been placed into the "red level," the highest measure on the country's stoplight alert system for Covid-19 restrictions.
"It's important to be clear that 2020 and 2021 will be very special years for humanity," Lopez-Gatell said as he urged people during the holiday season to avoid parties and reunions and instead save them for a later date.
The tighter measures include the closure of indoor dining, with only essential sectors like transport, energy, health and construction remaining open.
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Mexico City will take 'extraordinary measures' to stop surge in Covid-19 deaths - CNN
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