Sefton will go into Tier 3 from midnight tonight.
In tier three areas, household mixing is banned indoors and in private gardens, while the rule of six applies in public spaces. Shops, gyms and personal care services can remain open, but hospitality settings must close except for takeaway.
All of the tier changes will come into effect at 00:01 GMT on Thursday 31 December.
Prime Minister Boris Johnson said that 60% of UK coronavirus cases were now the new, more transmissible, strain of Covid-19.
Asked by political editor Laura Kuenssberg if the government had been too slow to act, he said: "What we, unfortunately, were not able to budget for was this this new variant."
He added: "It's spreading rapidly from the places where it's started, in the east of London and in Kent. And, alas, it's starting to seed across the country."
Announcing the rule changes, Mr Hancock said: "I know that tier three and four measures place a significant burden on people, and especially on businesses affected, but I am afraid it is absolutely necessary because of the number of cases that we've seen."
Labour shadow health secretary Jonathan Ashworth said people across England "will be deeply worried" that they have now been "in a form of restriction for months and months and months".
"It's having a huge impact on families and small businesses," he added.
On Tuesday, 53,135 new Covid cases were recorded in the UK - the highest single day rise since mass testing began - as well as 414 more deaths within 28 days of a positive test.
