Two halls of residence at Manchester Metropolitan University have been quarantined after 127 students tested positive for coronavirus.
Around 1,700 students at Birley campus and Cambridge Halls have been ordered to stay inside, it has been confirmed.
It's understood that no other halls of residence have been affected.
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Speaking about the outbreak, public health director for Manchester David Regan said it was important to act quickly in order to get the situation under control.
He said: "An important part of Manhchester's Local Response and Prevention Plan for coronavirus is to keep a close eye on the data and act swiftly and decisively where an outbreak is identified in order to contain the virus.
"That's what we've done here."
Manchester City Council said a number of measures had been implemented to provide students with support.
Coun Bev Craig, Executive Member for adult health and wellbeing for Manchester council, told the Manchester Evening News: "This is obviously very difficult for all of the young people involved and we will be working with the university and other public services to make sure that any of the students affected get the support they need.
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"Students are a vital part of our city, and as part of our plans we expected that numbers could rise as they returned to the city.
"As a vital part of our city, they are also under the same restrictions and rules as our longer term residents, and that's why this evidence-based approach is being taken early to reduce the spread.
"We understand that local residents may be concerned about this situation. We want to reassure them that the evidence so far suggests that transmission has been within the student community only and has not been more widespread. We are taking this collective action to ensure that remains the case."
This comes days after local reports stated a number of students at Birley campus had already tested positive following a 100-strong party in the courtyard.
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University and College Union general secretary Jo Grady said this was a predictable outcome after students returned to the city.
She said: "This is the latest catastrophe in a week where wholly predictable - and predicted - Covid outbreaks have caused havoc on campuses across the UK.
"We warned last month of the problems with moving thousands of students across the country and the time has come for urgent action from ministers and universities to protect staff and students.
"Manchester Metropolitan University shifting teaching online only for foundation and first year students exposes the total absurdity of the current position of trying to continue with blended learning.
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"There is no point encouraging students to come to university to self-isolate for a fortnight. This was a wholly predictable and unnecessary crisis. It is unfair on students, on staff and on their local communities."
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