Most of the upper North Island - including Auckland - will go straight into the red level under the new traffic light system from Friday, while the whole of the South Island will go to the less restrictive orange.
Auckland, Northland, Taupō and Rotorua Lakes Districts, Kawerau, Whakatane, Ōpōtiki Districts, Gisborne District, Wairoa District, Rangitikei, Whanganui and Ruapehu Districts will all move into the highest level of restrictions one the new Covid-19 protection framework comes into effect, Prime Minister Jacinda Ardern said on Monday.
The rest of the North Island will move to orange.
No regions will go straight to green.
Ardern said settings will be reviewed every two weeks.
Ardern said the long-awaited traffic light decision follows a successful domestic pandemic response.
She said recent months were perhaps the toughest New Zealand had experienced in the whole pandemic.
"The past three months have been hard though."
It was already established that Auckland would start the new setting at red, Ardern said.
"At red, it will feel a lot like level 2."
But Ardern said Aucklanders would be able to family and friends, in their homes, under the red light setting.
She added: "And use the bathroom."
For places at Orange, there are no gathering limits if Vaccine Passes are used.
Auckland was in Red as the epicentre of the current outbreak, and other regions were at red because of their vaccination rates and vulnerable populations.
"Red provides extra protections against Covid-19 such as requiring both Vaccine Passes and some capacity limits in the most-high risk settings – that's because if someone has Covid-19, the virus will find it harder to spread among fewer people who are at a distance.
"As we see what happens to cases and vaccination levels we can look to move regions down to Orange over time, where there are no gathering limits for those who are using vaccine passes."
The new traffic light system would also give greater certainty to business, Ardern said.
It was not a case of abandoning strict measures to combat Covid-19, but would build on past experience.
Ardern said no areas were at Green, to wait for vaccination rates to rise nationwide and allow the new framework to bed in.
"We have been cautious with this initial designation of traffic lights as the new framework beds in."
Cabinet will review settings and provide an update on Monday 13 December. The next update by Ministers will be on Monday 17 January, and will continue on a fortnightly basis.
"The factors considered when setting the colours in each region include vaccination, the state of the health system, testing, contact tracing and case management capacity, as well as the rate and effect of Covid-19 transmission."
Ardern compared the battle to a downhill descent of Mt Everest, and said 99.7 per cent of all Covid-19 cases worldwide were now Delta variant cases.
"Please be kind. Be kind to yourself. Be kind to each other. Everyone, and I mean everyone, is doing their best," Ardern added.
Ardern said festival organisers in areas under the Red regime will have to decide whether to go ahead or not.
"Ultimately, I can't make a commercial decision."
Major summer festivals in the Red setting include Rhythm 'n Vines.
Ardern said some of those areas still had low vaccination rates.
"So these are preventative measures."
But she added: "There are no hard borders with the exception of the Auckland boundary."
As for enforcement and compliance, she said policing would be around ensuring venues could operate vaccine passes safely.
Ardern says life in the Red zone will feel similar to level two, but with vaccine passes.
New transition payment announced
Deputy PM Grant Robertson said he acknowledged how tough the outbreak had been for business.
He said more than $6 billion in support had been provided since August.
A new transition payment will be made available for affected businesses in Auckland, Waikato and Northland.
This new payment would acknowledge restrictions companies had faced under the higher alert levels.
"The one-off transition payment will be activated through the Resurgence Support Payment (RSP) system criteria and be available on December 10," Robertson added.
At all levels of the new framework, most businesses will be able to operate," the Deputy PM and Finance Minister added.
Robertson said he would report back to Cabinet in the new year to see what help was needed.
But it was certain that targeted support in future would only be available under the Red setting.
"Under Orange and Green, we will not be providing the widespread economic support we have in the past."
182 new cases today
The announcement comes as the Delta outbreak continues to spread slowly but steadily across the country, with 182 new cases today. There are now 93 people in hospital - up 11 from yesterday - and 10 in ICU.
Ardern addressed the Omicron variant. She said New Zealand did not have the new variant but it was a reminder why strong, ongoing pandemic responses were needed.
Some countries have had to stand up borders or reopen quarantine facilities.
"We are not powerless tough," she said.
Omicron had not changed advice on boosters.
"We're especially keen to see our border and health workers receiving this additional protection."
Ardern has already stated no regions will be moving into the green setting, and Auckland, still the centre of the outbreak, will go straight to red.
The Government's decision comes as a new variant of Covid-19 gets closer to our doorstep - after confirmation that the potentially more infectious Omicron strain of the virus has reached Australia overnight.
Ardern told Three's AM Show this morning that it was too early to say what changes officials here may need to make in response to Omicron - particularly as New Zealand gets set to open its borders to Kiwi citizens and residents in Australia in mid-January.
Officials could respond "very quickly" at the border if need be, she said, and she acknowledged that travellers were still required to go through the managed isolation and quarantine system on arrival.
She said the Government needs more information before saying whether the move to allow travellers from Australia to skip MIQ and isolate at home from mid-January would change.
"We need to be prepared for it either to be possibly more severe, possibly more mild. We just don't know yet."
She said they would not be cancelling Christmas and had no reason to do that.
In the next few months, they had 20 people due to return from the high-risk region, but Ardern was not sure if they fit the new category to return now.
All cases were treated with absolute caution and anyone who was positive would go into the quarantine facilities.
Under all traffic light settings, events, restaurants, bars, gyms and hairdressers are expected to be able to remain open.
That is, provided they use a vaccine pass to ensure only vaccinated people are using their services.
Only under the red setting do events and gyms become limited as they have to restrict the number of people in attendance to 100 or fewer, while hairdressers also have to maintain stricter public health measures.
For those not using vaccine passes close-proximity businesses - such as hairdressers - are not able to operate. In gatherings allowed numbers are limited 25.
Earlier the Ministry of Health reported new cases were in Northland, Auckland and Waikato.
There was also a new case in the Nelson-Marlborough region, however that would be added into tomorrow's cases as it was confirmed after today's 9am deadline.
There are 167 cases in Auckland, 10 in Waikato and five cases in Northland.
There are 93 people in hospitals including 10 in ICU or HDU. Of the 93 cases in hospitals, an increase of 11 on yesterday, 17 are in North Shore, 33 in Middlemore, 37 in Auckland, four in Waikato and one in Rotorua.