Military personnel will join with police to enforce nationwide self-isolation under the unprecedented restrictions.

Schools and non-essential businesses will close, public transport and air travel will effectively end as the government ramps up its public coronavirus advisory to the maximum level from Thursday.

"Now is the time to put our plans into action," Ms Ardern said.

"We need to act now, or risk the virus taking hold as it has elsewhere.

"We currently have 102 cases, but so did Italy once."

Ms Ardern's announcement came as New Zealand confirmed a jump of 36 positive tests for the virus in the 24 hours since Sunday, including the first two cases of community transmission.

New Zealand has recorded 102 cases, but so far no deaths, of COVID-19.

By comparison, Australia has recorded at least 1600 cases.

The draconian measures have been championed by public health experts and supported by all of New Zealand's political parties.

They will take effect for at least four weeks, and dramatically change life as Kiwis know it.

Everyday human interactions will be limited to within households.

Kiwis will be allowed outside to walk the dog, or exercise by themselves, or to visit supermarkets or health services.

But only industries deemed "essential" - including health and emergency services workers, police, some public servants and media - will be allowed to continue, and otherwise citizens will be asked to stay home.

Supermarkets, pharmacies and essential services will remain open and accessible, with limited public transport available to those who need it.

Ms Ardern said fresh advice and modelling in the case of widespread transmission made the lockdown essential.

"If community transmission takes off in New Zealand the number of cases will double every five days," she said.

"If that happens unchecked, our health system will be inundated, and tens of thousands of New Zealanders will die."

Ms Ardern said she was fully aware of the sacrifices she was asking from Kiwis.

"I do not underestimate what I'm asking New Zealanders to do. It is huge. And I know it will feel daunting," she said.

"Everything you will all give up for the next few weeks, all of the lost contact with others.

"All of the isolation and difficult time entertaining children, it will literally save lives, thousands of lives.

"The worst case scenario is simply intolerable. It would represent the greatest loss of New Zealanders' lives in our history. And I will not take that chance."

Parliament will also be recalled for an emergency session on Wednesday, in which Ms Ardern will table an epidemic notice to enforce the lockdown.

It remains to be seen whether the New Zealand election can be held on September 19 as planned.

NEW ZEALAND'S CORONAVIRUS LOCKDOWN

NOW: LEVEL THREE

Prime Minister Jacinda Ardern has lifted the alert level in New Zealand to level three, or "Restrict", for the next two days. It means;

* All family and social gatherings - including weddings or picnics - are banned

* Bars, restaurants, gyms, cinemas and similar businesses to close

* No in-person health consultations and elective surgeries postponed

THEN: LEVEL FOUR

After 48 hours, New Zealand will move to the highest lockdown under its newly established alert system, or "Eradicate". This means;

* Mandatory self-isolation except to access essential services

* All non-essential business to close

* Educational facilities closed

* Re-prioritisation of healthcare services

Australian Associated Press