The move set off panic buying just weeks before the country hosts the Winter Olympic Games.
State media on Thursday reported that city officials ordered all residents to stay home unless they had a pressing reason to go out and suspended all transport to and from the city apart from special cases.
One person from each household will be permitted out every two days to buy household necessities, the order said. It took effect at midnight Wednesday, with no word on when it might be lifted.
There was no word on whether the virus was the newly surging Omicron variant or the far more common Delta.
China has recorded just seven Omicron cases — four in the southern manufacturing centre of Guangzhou, two in the southern city of Changsha and one in the northern port of Tianjin.
Social media posts recorded panic buying of groceries and household products, with the government saying new supplies would be brought in.
Residents posting on Thursday, however, said the situation remained relatively calm, with people allowed to travel in and out of the compounds in which they live.
Xi'an on Thursday reported another 63 locally transmitted cases over the previous 24 hours, pushing the city's total to at least 211 over the past week. Xi'an is the capital of Shaanxi province, famed for its imperial relics, as well as a major centre of industry.
China has also been dealing with a substantial outbreak in several cities in the eastern province of Zhejiang near Shanghai, although isolation measures there have been more narrowly targeted.
China has adopted strict pandemic control measures under its policy of seeking to drive new transmissions to zero, leading to frequent lockdowns, universal masking and mass testing.
While the policy has not been entirely successful while leading to massive disruptions in travel and trade, Beijing credits it with largely containing the spread of the virus.
Those measures have been stepped up in recent days ahead of the start of the Beijing Winter Olympic Games on February 4.
The Xi'an restrictions are some of the harshest since China in 2020 imposed a strict lockdown on more than 11 million people in and around the central city of Wuhan, after the coronavirus was first detected there in late 2019.
China has reported 4636 deaths among a total of 100,644 cases of COVID-19.
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