Most of New Zealand will move to beefed up Alert Level 2 at 11.59pm tomorrow, Tuesday, September 7.

Prime Minister Jacinda Ardern announced this afternoon that Cabinet has agreed to the downgrade, which excludes Auckland and Northland.

But it comes with conditions, including masks, scanning / record keeping, a limit of 50 people for indoor hospitality and event venues, 100 outdoors, and two-metre distancing in public venues, including gyms.

Schools and other education providers will be given 48 hours to prepare, and will reopen on Thursday morning.

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"As I've said many times before, Delta has changed the game, so in order to beat it we've had to adapt our game plan too," she said.

For Delta Level 2, face coverings are now mandatory inside most public venues, such as shops, however can be taken off in hospitality venues, including cafes, restaurants and bars.

Staff at these venues, however, must wear masks.

Ardern reiterated scanning / record keeping is now mandatory at bars, restaurants, cinemas, nightclubs, concerts, churches and close contact businesses such as hairdressers.

"What we've learnt is traditional contact tracing can't keep up with Delta, the virus is too fast. So record keeping and scanning continues to be our best tools to quickly track down any potential spread of Covid and keep us out of lockdown.

"It's also one of the best means we have of reducing the amount of time we need to spend in lockdown."

Because Delta is more transmissible, it is necessary to reduce numbers in venues, she said.

"The first is a limit of 50 people for indoor gatherings, hospitality setting and event venues. This coupled with the rules around customers being seated and tables being separated reduces down the risk of super spreader events.

"If you're an outdoor venue or have an outdoor space, you can have 100 people in that space, keeping in mind again the rules around being seated and separated.

"That's because ventilation makes such a huge difference in how infectious a Covid case is to others."

Indoor public facilities, like gyms, museums and libraries, must ensure people are separated by two metres, rather than one metre as before.

Ardern said the alert level will be reviewed by Cabinet next Monday. The intention is to return to Alert Level 1 as soon as is possible.

"When I've spoken to our public health officials around Alert Level 2, they still absolutely anticipate that if we continue to make progress we will get back to an Alert Level 1 environment."

There will also be weekly surveillance testing for essential workers crossing the Auckland boundary. They will need to show proof they have had a test in the past seven days.

About 3000 cross the alert level boundary each day. Auckland is set to remain in lockdown until next Tuesday.

Ardern said: "We are making progress, but we still have some real challenges ahead.

"That's why we need everyone's help with those two critical things; testing and follow the rules at alert levels."

Testing was necessary because there are still unlinked "mystery cases".

"These matter because so long as we don't know where a case has come from, we cannot tell if we have other chains of transmission in the community that we haven't isolated yet.

"That is a cause for concern and it is why testing is so important to us."

Dr Ashley Bloomfield said he recognised the testing for essential workers crossing the Auckland might be "inconvenient and unwelcome", but said testing remains crucial.

Yesterday was the lowest testing day in the latest outbreak, with 4750 swabs processed around the country.

"The falling test numbers reflect in large part a big reduction in people with symptoms," Bloomfield said. "This is the impact of the lockdown of stopping all respiratory illnesses from spreading through the community, and in addition, that we now have very few new locations of interest emerging.

"However, testing remains central to us being confident the outbreak is under control. Our most important message today is if you have an symptoms, you must get tested, wherever you are in New Zealand."

There are 20 new community cases of Covid-19 today, all in Auckland, bringing the total in this outbreak to 821.

It is the third day in a row where the number of new community cases was 20.

There are now 3.1 million registered users of the NZ Covid-19 tracer app, and there were 852,546 scans in the 24 hours to midday yesterday.

Vaccine efforts also continue, with 38,710 doses issued on Sunday, for a total of 3.9 million. Some 1.3 million people are now fully vaccinated. 

Ardern said moving to level two is positive "but the job is not done".

"We're within site of elimination but we cannot drop the ball."

• Check out the full list of Alert Level 2 restrictions and recommendations on the Government's Unite Against Covid website.