From Tuesday the city will be under the same restrictions as Sandwell, Birmingham and Solihull, meaning people will be banned from meeting others who are not part of their household or support bubble, in homes or gardens.
The new restrictions will be enforced by West Midlands Police, with people who breach the rules and refuse to cooperate with officers liable for a fine of £100.
Council bosses and MPs urged people to start following the measures on a voluntary basis earlier this week in a bid to stem the surge in the number of cases in the city.
They have now warned that even stricter measures could be introduced in the coming weeks, including pubs and restaurants being forced to close by 10pm.
NHS data for the seven days to September 15 show 117 Covid cases in the city, at a rate of 44.7 per 100,000 people.
The rate is higher than some parts of the North East, which saw strict new measures introduced today.
The Government has this afternoon confirmed the restrictions for Wolverhampton, as well as new measures for other parts of the country.
In parts of the North West - including Merseyside, Warrington, Halton and some of Lancashire - restrictions will start from next Tuesday. They include limiting operating hours for leisure and entertainment venues including restaurants, pubs, and cinemas.
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And in parts of West Yorkshire people will be banned from socialising with other people outside of their own households or support bubble in private homes and gardens.
Health and Social Care Secretary, Matt Hancock said: “We are seeing cases of coronavirus rise fast in Lancashire, Merseyside, West Yorkshire, Warrington, Halton and Wolverhampton.
“Local leaders in these areas have asked for stronger restrictions to be put in place to protect local people, and we are acting decisively to support them.
“I know these restrictions will make every-day life harder for many, but I know that residents will work together and respect the rules so we can reduce rates of transmission.
“I urge local people to isolate and get a test if you have symptoms, follow the advice of NHS Test and Trace, and always remember ‘hands, face, space’. By sticking to these steps, we will get through this together.”
'Act now to stop full shut down'
Wolverhampton South West Conservative MP Stuart Anderson, said: "As a city, we have come together to put in place the best plan for Wolverhampton to help control the virus.
"At the moment the numbers are sky-rocketing, and we are doing everything we can to keep the schools open and to help our businesses to operate.
"People need to understand that if these new measures don't work, then we will end up with restrictions like they are having in the North East, and possibly even returning to how we were earlier in the year.
"It will be devastating for the city if we are shut down again. Nobody wants to be in that position, but that is where we will be if we take no action now."
Pat McFadden, the Labour MP for Wolverhampton South East, said: "The infection rate has been rising sharply in Wolverhampton in the last couple of weeks and we have known for some days that restrictions like this were coming.
"I know the public have been through a lot already but I would encourage everyone to take this seriously and abide by these new restrictions. We have to work together to get on top of this latest increase in cases.
"The Government of course must also do its part by getting a grip of the testing situation, without which the job becomes a lot harder."
Wolverhampton Council leader Councillor Ian Brookfield said Ministers had initially wanted to implement the same restrictions that are now in place in the North East.
"We successfully argued against that as we don't think the added measures, including curfews on pubs, are required at this time," he said.
The city had 23 new cases on September 10, then 22 on each of the following two days, and 18 new cases on September 13.
Meanwhile other parts of the region are under threat of having new restrictions imposed due to rising cases.
In the seven days up to September 15, Walsall has 87 cases at a rate of 30.7 per 100,000 people, while Dudley has 76 cases (23.7).
Sandwell, which went into local lockdown this week, has 153 cases at 46.7 per 100,000 people.