The measures, agreed by the cabinet on Friday, were introduced at midnight on Sunday and will last until Jan. 30.
All restaurants and bars, excluding takeaways and delivery services, must now close at 8 p.m., and there are limits on attendance at indoor and outdoor events scheduled for earlier in the day.
Restricted movement advice for all close contacts of COVID-19 cases has also been enhanced.
Taoiseach Micheal Martin said the new measures were necessary because of the rise in infections caused by Omicron.
He said: “Left unchecked, this new strain will represent a very significant threat to hospitals and critical care, but also a threat to all of society and the economy.”
But hospitality groups have warned that the restrictions will lead to widespread closures and redundancies in the sector.
Padraig Cribben, chief executive of the Vintners’ Federation of Ireland (VFI), said: “The reality is this decision will decimate the trade that was already on its knees.”
On Sunday, Public Expenditure Minister Michael McGrath said that no government wanted to be in the position of making decisions that would cost jobs, but said the first duty was to protect the health of the population.
Asked about an estimate from the hospitality industry that 60,000 people in Ireland could lose their jobs, McGrath told RTE: “The numbers will be significant, certainly in the tens of thousands.”
Just weeks after the first Omicron case was identified in Ireland, it has now become the dominant strain of COVID-19.
The Health Protection Surveillance Centre has estimated that approximately 52 percent of reported cases are now due to the Omicron variant.
Chief medical officer Tony Holohan said: “It has taken less than two weeks for Omicron to become the dominant strain of COVID-19 in Ireland, revealing just how transmissible this variant is.”
By Jonathan McCambridge