Italy is set to lock down at least 16 million people in the region of Lombardy and in 11 other provinces in the north and east of the country.
The mandatory quarantine will last until early April.
The dramatic escalation in the country's efforts to contain the new deadly coronavirus will close gyms, pools, museums and ski resorts.
Italy is Europe's worst hit-country and reported a steep rise in virus infections on Saturday.
The new measures could take effect as early as Sunday and will last until 3 April.
The death toll in Italy has passed 230, with officials reporting more than 50 deaths in 24 hours. The number of confirmed cases jumped by more than 1200 to 5883 on Saturday.
The measures published in a draft government decree were obtained by Italian newspaper Corriere della Sera.
They are set to be signed in the coming hours.
The whole northern region of Lombardy, home to 10 million people and Italy's financial centre Milan, will be closed off except to emergency access, and 11 provinces including Venice, Parma and Modena will be affected - a total of 16m people.
Until now around 50,000 people in northern Italy had been affected by quarantine measures.
Night clubs, gyms, swimming pools, museums and ski resorts will be closed.
Restaurants and cafes can open but customers must sit at least a metre apart.
People will be told to stay home as much as possible, and those who break the quarantine could face three months in jail.
Read more about the Covid-19 coronavirus:
- Covid-19: What you need to know
- Coronavirus: latest updates
- Timeline: virus's spread across the globe
- Scientific hand-washing advice to avoid infection
- Coronavirus patient 'never really felt unwell'
- More Covid-19 news
Sports competitions will close to the public, and the president of Italy's football players' union has called for all football to stop.
The World Health Organization has advised Italy to strongly focus on virus containment measures as infections spread in the country.
Leading Italian politician Nicola Zingaretti said on Saturday he had tested positive for the virus.
"I am fine but I will have to stay home for the next few days," the leader of Italy's centre-left Democratic Party (PD) said in a Facebook post.
The country has said it will start recruiting retired doctors in an effort to combat the escalating outbreak.
Elsewhere, Iran has confirmed almost 6000 infections and 145 deaths, and the number of cases worldwide has passed 100,000, officials say.
A second MP was reportedly among those to have died in Iran, where health officials fear the number of cases may actually be much higher.
There have so far been nearly 3500 coronavirus deaths recorded worldwide. The majority have been in China, where the virus originated in December.
The head of the World Health Organization (WHO), Tedros Adhanom Ghebreyesus, has called the spread of the virus "deeply concerning" and urged all countries to make containment "their highest priority".