Gatherings of more than two people will be banned in Germany, Chancellor Angela Merkel said Sunday, as Europe's biggest economy toughened restrictions to stop the spread of the novel coronavirus.

Germany has already closed down schools, non-essential shops and urged people not to gather in groups but has not yet imposed blanket limits on group gatherings.

"Our own behavior is the most effective way" of slowing the rate of infection, Merkel said of the unprecedented nationwide measures, which are initially slated to remain in force for two weeks.

The measures will be imposed by individual states, who will decide when to roll them out.

Some exceptions to the public gathering rule will be allowed, including for families living under the same roof and going out together for fresh air.

On top of the ban on gatherings, businesses like massage studios and hairdressers where people come into close contact will be shut.

And restaurants will be closed across Germany except for takeaway food.

Merkel appealed to citizens' "reason and empathy" in implementing the contact restrictions, saying she had been "very moved" by how closely people had stuck to less stringent measures implemented in recent days.

"That's how we can save lives," the chancellor recalled.

"It's of vital, vital importance to obey the rule" to remain at least two meters away from other people, Merkel said, adding "at that distance the risk of infection is close to zero."

Asked if she too was respecting the distancing requirements, Merkel said "my life has fundamentally changed and mostly consists of telephone and video conferences".

Merkel spoke following a telephone conference with the premiers of Germany's 16 federal states, who have been criticized in recent days for failing to agree on a nationwide set of rules for infection control.

But while several regional leaders said in their own press conferences they would stick to the new rules, news agency DPA reported Bavaria would impose its own, tougher restrictions allowing people to leave the house alone or with one relative.