Speaking at a press briefing Ms Foster said: “There are areas where the spread is of particular concern, where cases are double or treble the average rate for the province.”
There will be “no mixing of households in private dwellings”, however, those with child care and other caring responsibilities will be exempt.
No more than six people from two households can meet in gardens.
Ms Foster added: “What we are proposing today is a proportionate and measured approach to specific (circumstances) existing currently in identified areas.”
She urged people to take action now to “protect yourselves and protect others”.
The measures will be in place for at least the next two weeks.
Despite the new restrictions, pubs which do not serve food will also be able to open from September 21st.
Ms Foster said the spread of Covid-19 was happening in households and affecting more older people.
“It is a grave situation but we also need to ensure that our economy continues to flourish.”
Ms Foster was joined by Ms O'Neill in their first joint-briefing since a disagreement regarding Ms O'Neill's attendance at the funeral of Bobby Storey.
Speaking at the briefing Ms O’Neill said: “I am glad we are standing here on this platform today at a crucial time in the fight-back against Covid-19.
“We need to chart our way through what is going to be a very difficult winter.”
Earlier, Ms O'Neill acknowledged that her attendance at the funeral undermined public health messaging.
Speaking to RTÉ she said: “It wasn’t my intention this would happen, but it did, I accept this and I regret this is the case.
“I accept that we have not been able to deliver clear messaging in the format that was the practice before this controversy.”
