Pubs and restaurants across central Scotland - affecting about 3.4 million people in the Greater Glasgow and Clyde, Lanarkshire, Forth Valley, Lothian and Ayrshire and Arran health board areas - are to be closed from 6pm on Friday until October 25.
Hotels will remain open for residents and cafes without an alcohol licence will stay open until 6pm to “support social isolation.”
In other parts of Scotland, pubs and restaurants will be open from 6am to 6pm but can only serve alcohol outdoors until 10pm.
Ms Sturgeon said the restrictions were designed to “arrest a worrying increase in infection” but acknowledged they would be disruptive to many businesses.
But she has pledged to offer a £40 million support package for those affected.
She said businesses can also use the UK Government’s job retention scheme for the rest of October but acknowledged this will require a “significant contribution” from employers, adding: “One of the things we will discuss with businesses, in relation to our own support package, is how we can mitigate some or all of that contribution.”
Opposition parties have already called for more details on the £40 million support package. The Scotsman has asked the Scottish Government for more information about how businesses can apply and how decisions will be made about who gets how much.
It comes as a further 1,054 cases of Covid-19 were confirmed in Scotland and one more death was reported in the past 24 hours.
Hospital admissions of people with confirmed Covid-19 have risen by 57 since Tuesday to 319, with 28 people in intensive care.
Two weeks ago, the average number of new daily cases was 285 and it is now 788, with reported Covid cases in people over the age of 80 increasing by 60 percent in the past week.
However, Ms Sturgeon highlighted that progress has been made and the situation now is better than it was in March with more testing in place and a better understanding of how to reduce the risk of transmission.