From Wednesday, masks will be required across indoor retail and hospitality venues as well as aged care, workplaces and on public transport.
Aged care restrictions will also be reintroduced, with a limit of five visitors each day.Â
The mask mandate will continue over Christmas and the new year period before it is reviewed in January.
"Wearing a mask indoors is a small price to pay to keep your family and friends safe," Acting Chief Minister Yvette Berry told reporters on Tuesday.
It came as the national capital recorded 16 new infections and residents faced lengthy queues for testing.
Some testing clinics were forced to close early after reaching capacity.
Nearly 6000 results were processed on Monday as demand for tests reached levels not seen since August.
Half of the ACT's 124 active COVID-19 cases have been identified as the Omicron strain.
Three virus patients are in hospital, but none have that variant.
Chief Health Officer Kerryn Coleman expected Omicron to become the dominant strain in the ACT.
"We anticipate we will see an escalation in cases similar to that in NSW," she said.
"The unexpected emergency at this time of Omicron is posing an increasing risk to our community, and it's why we have made the decision to reintroduce mask wearing."
The number of active cases in the national capital has nearly doubled in the past week.
Vaccination rates remain largely unchanged, with 98.4 per cent of residents aged 12 and older double-dosed.
Health Minister Rachel Stephen-Smith reassured people Christmas celebrations could still go ahead.
But people should not attend if they're unwell or are required to isolate.
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