This means that millions of people in the capital will be banned from meeting people from other households inside, whether at their homes or in a pub.
Londoners have also been advised to avoid public transport and reduce the number of trips they make when possible.
Health Minister Helen Whately informed MPs in London of the decision during an appeal this morning.
The Mayor of London, Sadiq Khan, said COVID-19 is “spreading rapidly to every corner of our city”, with a “significant number” of boroughs reporting an average of 100 cases per 100,000 inhabitants.
“No one wants to see more restrictions, but it is deemed necessary to protect Londoners by myself, the leaders of the London Council and the ministers,” he said.
Mr Khan said “nationwide action” was still needed, calling for a “national short circuit breaker” lockout.
It “could save thousands of lives and bring the virus down to manageable levels,” he told the London Assembly.
Mr Khan added: ‘In London we had the worst of COVID-19 in the spring. Thousands of lives have been lost and our economy has been left behind.
“We simply cannot afford to wait for the government to take action again. ”
On Tuesday, Mr Khan told Sky News that further restrictions were “inevitable” as hospital admissions and infection rates “were heading in the wrong direction”.
The London-wide average infection rate was 78 new cases per 100,000 people in the week to October 9.
However, it varies considerably from one arrondissement to another. Ealing had the highest rate with 119 new cases, while Bexley had 51.6.
This is still much lower than the infection rate in many parts of northern England, such as the Liverpool area, which is subject to the most severe level three restrictions.