Plans to ease lockdown will be put on hold in the city - meaning pubs, restaurants and hairdressers will not reopen on 4 July, as they are scheduled to do elsewhere in the county.
From tomorrow, non-essential retail will close. Schools will close on Thursday, staying open only for vulnerable children and children of key workers.
Relaxation of shielding measures, scheduled from 6 July, also will not take place. Travel into or within Leicester is also not advised.
Hancock said: "Given the growing outbreak in Leicester, we cannot recommend that the easing of the national lockdown, set to take place on 4 July, happens in Leicester.
"Having taken clinical advice on the actions necessary and discussed them with the local team in Leicester and Leicestershire, we have made some difficult but important decisions."
Leicester has so far had over 2,900 confirmed cases of coronavirus, with 866 of these reported in the two weeks leading up to 23 June. Leicester has an infection rate of 135 per 100,000, three times higher than the next local area, Hancock said.
Leicester mayor Sir Peter Soulsby said he received an email from the government overnight advising that the city could be made to continue with the current level of lockdown for a further two weeks as the rest of the country relaxes restrictions.
Sir Peter was critical of the decision, saying: "I think it's very unclear as to what difference it would make if they continue the regulations in Leicester and why you would do it.
"Frankly, if the virus is out of control and spreading in Leicester with the restrictions, I can't understand how extending them for a further two weeks would make any difference to that."
Businesses reacted with dismay to the news that lockdown measures could be extended locally. A Leicester hairdresser told Leicester Live: "My phone has been going mad. I don't know what to say to people.
"The last thing I want to do is to tell several people a time and a date and we just can't keep it."
Meanwhile, Shaf Islam, who owns the local Chutney Ivy restaurant, told the same publication: "I'm devastated to hear that the lockdown could continue in Leicester.
"I have spent the past month preparing to reopen fully for in-dining, spending a lot of much-needed resources on screens, booking anti-viral fogging company, purchasing parasols and training staff on Covid safety."Featured Image Credit: PA