Wellington will move to alert level 2 tomorrow night, with 15 active cases of Covid-19 in the region.
Prime Minister Jacinda Ardern has announced new level 2 rules, which one Wellington hospitality businessman has described as a "million times more difficult" than previous level 2 restrictions.
The number of cases in the Wellington Delta outbreak has totalled 17, with two of those cases having recovered.
All new cases recorded in the past week have been household contacts.
Wellington mayor Andy Foster said level 2 was a move in the right direction.
"And moving in the right direction possibly sooner than some people expected", he said.
Foster said mask wearing, scanning in, and keeping the Auckland border tight were essential if people wanted to get to alert level 1.
He described the Government's revised level 2 restrictions as cautious and conservative.
"On the other hand, we've seen what's happened in other jurisdictions where they have been looser - you could take a step forward and suddenly find you're ten steps backwards."
Ardern said this afternoon face masks must now be worn inside most public venues, including shops, malls and public spaces.
Masks could be removed at bars and restaurants, for eating and drinking. However, staff would have to wear masks.
Ardern said new rules on scanning also applied at level 2: mandatory scanning at bars, restaurants, cinemas, churches, hairdressers and anywhere where there was close contact between people.
There would be a limit of 50 people at hospitality and event venues, while outdoor venues could have up to 100 people.
Jordan Mills, a director of a group that owns several hospitality businesses in Wellington, said the new level 2 rules had a "huge effect" on business.
He was weighing up whether it was even financially viable to open some venues under the restrictions.
"100 people was tough but we made it work, but obviously halving it to 50 makes it a million times more difficult.
"But such is the world we're living in in New Zealand right now. So we've just got to adapt and try to adjust and make it work hopefully, for a short period of time, so we can get back to level 1."
Wellington Chamber of Commerce chief executive Simon Arcus said three quarters of businesses could operate at level 2.
"It is a better setting for businesses, they can open more broadly, but still there are challenges with that 50 limit."
Foster acknowledged the new limit at indoor venues would be challenging for the hospitality industry, but said it was good people could actually open rather than operating "through a hole in the wall".
The council's chief executive and senior management were working through what the new restrictions would mean for council services, Foster said.
At indoor public facilities, such as gyms and libraries, the same rules would apply as for supermarkets: a 2-metre space would be required.
Councillors have been advised their meetings will continue on a virtual basis this week to give council staff time to focus on public facing services.
Mask-wearing in schools wasn't mandatory, but director-general of health Ashley Bloomfield said it was recommended, especially for students 12 and older. The same applied to universities.
Hutt Valley High School principal Denise Johnson said this afternoon she was waiting for advice from the ministry on mask wearing.
But she predicted more students and staff would be wearing them this time around compared to after last year's alert level 3 and 4 restrictions.
"Time will tell. Initially I think there be a flurry of it and then people get a little bit slack on things so I guess it's keeping up the mask wearing and the good habits that have been established."