A maximum of six people will be allowed to meet in pubs, cinemas and restaurants in Wales from 26 December, the first minister has announced.
And two metres social distancing rules are to return in public places, Mark Drakeford said.
Licensed premises will have to offer table service only, face masks will have to be worn and contact tracing details collected.
Outdoor events will be limited to 50, with 30 indoors.
Advice has been given to limit household mixing and use lateral flow tests beforehand, with a specific offence for having gatherings of more than 30 people.
Spectators at community sports matches will also be limited to 50 people.
Mr Drakeford announced the return to some Alert Level Two restrictions at a Welsh government press briefing.
The number of identified Omicron cases in Wales grew by 204 on Tuesday to 640.
Mr Drakeford also urged people to get vaccinated, saying this is “the most important thing we can do to protect ourselves”.
“We are facing a very serious situation in Wales. A wave of infections caused by the new, fast-moving and very-infectious Omicron variant is headed our way,” Mr Drakeford said.
“This new form of coronavirus could infect large numbers of people in Wales, disrupting daily lives and businesses and could cause an increase in the number of people who need hospital care in the coming weeks.”
He said early action was needed to try and control the spread of the Omicron variant.
‘High vaccination coverage’
“As we enter our second winter of the pandemic, we have high vaccination coverage and tens of thousands of extra boosters are being given every day,” he added.
“We also have access to the rapid lateral flow tests to help us all identify signs of infection without symptoms.
“Both of these, together with everything we have learned over the last two years will help to keep us safe at home without the need for new rules and regulations about mixing at home.”