Auckland and Northland will stay in level 4, likely for a further two weeks, Ardern said.
Ardern said the three reasons keeping the rest of the country in level 4 for a few more days are because it will provide a full two-week cycle, there are cases in Wellington, and the positive wastewater result in Christchurch.
The Restaurant Association says South Island hospitality businesses hopeful of a move of alert levels this weekend will be disappointed by the extension.
"We have heard from several members that they had only just made their final repayments on loans from the 2020 lockdowns, so they're devastated they're back in that position of starting the process again," association CEO Marisa Bidois said.
"Our most recent feedback from members shows that whilst they largely support the level 4 lockdown, 75 per cent of those businesses wouldn't be financially viable after two weeks at this level."
Bidois said most people would understand just how challenging level 4 is for any industry that can't work from home.
"For businesses owners, it means no revenue at all which is very stressful when you have bills to pay."
She said they urged all hospitality businesses doing it hard right now to stay strong and seek help.
The Canterbury Employers' Chamber of Commerce is echoing that message.
Chief executive Leeann Watson said the alert level announcement was disappointing but it was good to get confirmation that from next Wednesday, all of New Zealand south of the Auckland boundary would move to level 3.
"Many of the businesses we have been talking to had been hoping to move down a level today, so they can either operate tomorrow or put plans in place for Monday, as we know that at alert level 3, 90 per cent of businesses will be able to operate and do so safely," Watson said.
"We also know that in lockdown Treasury has forecast it to cost the country $1.45 billion per week - and that's just the economic impact, not to mention the emotional toll on many people."
She said while the Government had to weigh any decision-making with the impact on public health, the reality was that ongoing lockdowns cannot be part of our long-term future.
"We need to identify ways to operate safely and accelerate our vaccination programme, as it will be critical that we do everything we can to help businesses, to find a way for our exporting manufacturers to continue to trade on the global market, and to help our SMEs continue to keep trading.
"While the Delta variant poses new risks and requires a new way of thinking, we can still take the lessons we have learned over the past 12 months along with the improvements in technology and come up with a different plan."
A fully funded Covid-19 Business Helpline service is available for all businesses in Aotearoa New Zealand. In the South Island, the phone number is 0800 50 50 96.
There have so far been no cases of Covid-19 detected in the South Island community despite the Delta outbreak reaching 347. Most cases are in Auckland and 14 are in Wellington.
The virus was again detected in Christchurch wastewater for a third day today but that is most likely because of at least three confirmed cases in MIQ in the city.
Christchurch Mayor Lianne Dalziel is welcoming the news of the upcoming alert level change but says it is important that people remain vigilant and follow the rules.
"We are fortunate that we have not had any community cases of the Delta variant in the South Island so far, but this is not the time for us to get complacent," she said.
"We need to continue to follow the Government advice and stick to the Alert Level rules so that we lessen the risk of the virus taking hold in our communities."
When restrictions loosen in the South Island and elsewhere - will life actually change much?
But there will be slightly more freedom under the current Government Covid-19 rules.
STAY HOME STAY SAFE - STILL
As it stands currently, at alert level 3 people must legally stay within their household bubble whenever they are not at work or school.
Bubbles can be expanded to connect with close family and whānau or to bring in caregivers, or support isolated people.
Masks are still mandatory in all public places and everyone over the age of 12 legally must continue to keep a record of where they have been when visiting certain places so contact tracing can happen quickly.
Physical distancing must continue to be maintained and travel is still limited - you can travel within your local area for supplies and exercise but that's it.
"Now is not the time to take up new activities, or expose yourself or your bubble to any risk. You can do low-risk recreation activities in your local area," the Government urges.
TRAVEL AND PUBLIC SPACES
Travel between regions will remain heavily restricted. If there is a boundary put in place by the Government, that information will be made public and published on the Unite against Covid-19 official website.
Public spaces remain closed: libraries, museums, cinemas, food courts, gyms, pools, playgrounds and markets.
Public events and venues also remain banned and closed under alert level 3. Photo / George Heard
Public events and venues also remain banned and closed.
But gatherings of up to 10 people will be allowed for wedding and civil union ceremonies, funerals and tangihanga.
Physical distancing and public health measures legally must be maintained at such events.
The Government still recommends staff work from home if they can.
If your business requires close physical contact it cannot operate.
Businesses need to display a QR code and have an alternative contact tracing system.
Customers cannot come on to your premises — unless you are a supermarket, dairy, butcher, fishmonger, greengrocer, petrol station, pharmacy or permitted health service.
Your business legally must be contactless. Your customers can pay online, over the phone or in a contactless way. Delivery or pick-up legally must also be contactless.
Basic hygiene measures legally must be maintained: physical distancing, hand washing and regularly cleaning surfaces.
Staff legally must remain a minimum of 1 metre apart at all times where practical.
Other measures, such as personal protective equipment (PPE) including face coverings, are recommended as being used where appropriate.
SCHOOL'S STILL OUT - MOSTLY
Children and young people should learn from home at alert level 3.
Any child who does not have supervision at home from an appropriate person can attend their service or school.
FUNERALS AND CEMETERIES
At alert level 3, priests, imam and religious celebrants can provide last rites in a hospital, hospice or private residence and funerals can be officiated by your imam.
Funeral directors will work closely with Muslim communities to support ghusl (ritual washing) and janaza (prayer over the body) being carried out safely.
As per the rules though, just 10 people can attend the funeral.
If you need to travel into or out of a region for a funeral or tangihanga you will need to apply for an exemption.
Kiwis can visit a cemetery in their region, if you can do so safely while keeping two metres away from people not in your bubble.
