The full government cabinet will meet in person this afternoon to decide on recommendations presented by the National Public Health Emergency Team (NPHET).
This follows a cabinet sub-committee meeting on Covid-19 to consider NPHET's advice.
It is expected that indoor dining in bars and restaurants is set to be prohibited in Dublin when the capital enters Level Three of restrictions due to rising case numbers.
An announcement is expected this evening from the government.
Dublin restaurateurs have heavily criticised the expected decision and say thousands of jobs will be at risk and numerous businesses will struggle.
The Labour Party has called on the full €350 pandemic unemployment payment (PUP) to be restored in the event of a new local lockdown.
The payment, which was introduced at the beginning of the pandemic, is still being claimed by over 200,000 workers laid off due to Covid-19.
It was yesterday cut to €300 a week for those who earned more than €300 per week before the pandemic and to €250 per week for those who previously earned between €200 and €300 per week.
Thousands of people will be temporarily laid off if Dublin moves to level three this evening, according to a leading economist.
Economist Jim Power said the timing of the decision is unfortuante as the economy in the capital has not had a chance to recover fully from the first lockdown and further restrictions will hinder its progress further.
Mr Power said: "It comes at a time when the Dublin economy was already struggling.
"The city centre is really struggling at the moment and this will just exacerbate those pressures and will certainly lead to further job layoffs and will also push further out any prospect of a meaningful recovery.
"So I think Dublin is in for a long hard winter."
Meanwhile, the HSE's chief executive has warned the health service is already coming under significant pressure due to increased Covid-19 cases and warned hospital wards may have to close.
Paul Reid expressed concern that 39% of cases in the last seven days have come from the community and the source cannot be pinpointed. Mr Reid also said that high positivity levels for Covid-19 testing among those presenting for a test is also a worrying sign.
The HSE chief executive said an outbreak of Covid-19 can have a signficant "freezing" effect on the hospital system that requires a hospital ward to be closed and cleaned.
This "constrains an already constrained system,” Mr Reid said.
The decisions that the government makes today on increasing Covid-19 restrictions in Dublin "will ultimately save lives", the Tourism Minister has said.
Catherine Martin said that while no decision has been made yet on the additional restrictions that Dublin and the rest of the country will face, there must be "a balance between lives and livelihoods".
Cabinet will meet today to decide whether to move Dublin to Level Three of the Covid-19 framework announced this week.
Speaking on Newstalk Breakfast, Ms Martin said that the government was aware of the sacrifices it may ask people to make today.
"Any decision about that will be taken by government will not be taken lightly. But obviously health has to come first.
"The number of cases of Covid, and the level of hospitalisations and deaths we've been told will increase exponentially in the coming weeks unless we take measures know to reduce our contacts.
"We must stop the virus taking hold of this country. We have to prioritise saving lives."
The chief executive of the Restaurants Association of Ireland (RAI), Adrian Cummins has said that the Government is making the hospitality sector “pay for the sins of others”.
Under the proposed additional restrictions dining in restaurants and pubs which serve food will only be permitted if they have outdoor facilities, or for takeaway services.
“We’re not the problem, the problem is in households,” Mr Cummins told RTÉ radio’s Morning Ireland, “This is effectively a hospitality lockdown.”
Mr Cummins said the sector was shocked at the restrictions and that there had been no consultation with the sector. “We had no indication of what the restrictions would be.”
With winter approaching the proposal in relation to outdoor dining would not mean anything, he said as the Irish hospitality sector was not “geared up” for such a service.
“This is about livelihoods. Businesses are now staring down the banks looking for loans to be paid, landlords looking for rent and suppliers looking to be paid. The industry is in crisis.
Mr Cummins said that the hospitality sector wanted to do its part with regard to public health, the right thing for the country, but they felt that the Government was targeting the sector with the least amount of cases.“This will have huge ramifications for the industry.”
Mr Cummins warned of job losses of between 30,000 and 50,000 in the county of Dublin. “Many small businesses will not recover.”
Hotels in Dublin will also be affected by the expected new restrictions.
The Irish Hotels Federation (IHF) said some hotels may close temporarily.
IHF president Elaina Fitzgerald-Kane said: "I do expect this further curtailment, [...] it really has an impact on the whole of the country to a degree in terms of Dublin.
"I do expect that there will be hotels and guest houses who will close temporarily on the foot of this and it just adds to that pressure in terms of operating."
Dublin is set for a county-wide lockdown after public health officials recommended extra restrictions to fight the spread of Covid-19.
The National Public Health Emergency Team (NPHET) met yesterday to discuss putting Dublin into Covid level three, with further added restrictions.
Travel in and out of the county would be restricted if the proposals are adopted.
NPHET also believes cafes and restaurants should close at this level.
The level-three lockdown could see 1.4m people subject to a ban on social gatherings, both indoors or outdoors, with no sports matches or events allowed.
NPHET is also recommending that third-level colleges in Dublin should offer tuition online as much as possible.
It is understood any announcement about further restrictions in Dublin will be made by Taoiseach Micheál Martin this afternoon.
Meanwhile, a Kildare school has been told to shut down after the discovery of a Covid-19 cluster.
According to the HSE, the discovery has been made at Scoil na Mainistreach, in Celbridge, Co Kildare.
Following testing within the school community, it was recommended the school close.
In a letter to the school’s principal, public health specialist Ruth McDermot said: “Further cases of Covid-19 have been identified following testing by Public Health.
“We recommend that the school should close while the investigation is ongoing.”
Pupils and teachers at the school who are believed to be close contacts of the infected person have been told to avoid public transport, and also avoid all shops “unless absolutely necessary”.
They have also been told to stay away from elderly people, and anybody with an underlying health condition.