Germany will go into stricter lockdown from Wednesday, closing non-essential shops and limiting the size of private gatherings, Chancellor Angela Merkel and regional leaders agreed on Sunday.

The tighter restrictive measures, which will be effective until Jan. 10, were in response to an "exponential growth" in the number of COVID-19 cases in Germany, according to a policy paper.

"Today is the day to do what is necessary," Merkel told journalists in Berlin on Sunday.

Starting from Wednesday, most retail stores will be closed except for those covering daily or holiday needs, such as supermarkets, pharmacies, banks and Christmas tree shops. Schools and daycare centers will also be closed. Companies will be asked to take work-from-home solutions.

Private gatherings will be limited to a maximum of five people from two households, excluding children up to the age of 14. From Dec. 24 to 26, meetings with another four people who go beyond one's own household but from the closest family circle should be permitted.

There will be a nationwide ban on fireworks sales and public outdoor gatherings on New Year's Eve. Drinking alcoholic beverages in public places will also be prohibited.

On Jan. 5, Merkel and the state leaders will consult again to decide on measures for the next stage.

Germany added 20,200 new COVID-19 cases over the past 24 hours, bringing the total to 1,320,716, according to the Robert Koch Institute.