Those living in the city of 11 million have also been told to avoid crowds and minimise public gatherings.
The new virus has spread from Wuhan to several Chinese provinces as well as the US, Thailand, and South Korea.
There are 440 confirmed cases, with the origin a seafood market that "conducted illegal transactions of wild animals".
"Basically, do not go to Wuhan. And those in Wuhan please do not leave the city," said National Health Commission vice-minister Li Bin in one of the first public briefings since the beginning of the outbreak.
Authorities also admitted that the country was now at the "most critical stage" of prevention and control.
China had earlier confirmed that human-to-human transmission of the virus had taken place.
The virus, known also as 2019-nCoV, is understood to be a new strain of coronavirus that has not previously been identified in humans.
Signs of infection include respiratory symptoms, fever, cough, shortness of breath and breathing difficulties. (BBC)