Germany is extending its lockdown until April 18 and calling on citizens to stay home for five days over the Easter holidays to try to break a third virus wave.
In talks that ran deep into the night on Monday, Chancellor Angela Merkel pushed the leaders of Germany's 16 states to take a tougher stance to fight the pandemic.
The move reverses plans for a gradual re-opening of the economy agreed earlier this month after a sharp rise in the infection rate.
"We are now in a very serious situation," she told journalists at a news conference, adding that Germany was in a race against time to vaccinate its population.
Germany started cautiously easing restrictions earlier this month.
However the spread of more infectious variants of the virus has pushed up cases, prompting concerns hospitals could soon be overstretched without further curbs.
The Robert Koch Institute for Infectious Diseases said the number of cases per 100,000 population over a week stood at 107 on Monday, above the 100 threshold intensive care units start running out of capacity.
More than 3000 people were in intensive care beds as of Sunday.