Those living in the affected areas of the capital - a total of 19 civil parishes that do not include downtown Lisbon - will be allowed to leave home only to buy essential goods such as food or medication, and to travel to and from work.
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The measure will be in place from July 1 until July 14 and it will then be reviewed, according to a government document.
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But localised outbreaks in poorer neighbourhoods and industrial hubs, as well as stemming from parties and raves along the coast, have kept cases increasing at a steady daily rate in the hundreds for the past month.
Images of overcrowded trains and buses to and from the city center have raised alarms, with many people blaming public transport for the new cases.