The government has told all Italians to stay at home and avoid all non-essential travel until April 3 in a bid to slow Europe's worst outbreak of coronavirus.

Prime Minister Giuseppe Conte unexpectedly expanded the so-called red zone from the worst-hit northern regions to the entire country on Monday night, introducing the most severe controls on a Western nation since World War II.

The move shocked many small businesses, which fear for their future.

"It looks like an apocalypse has struck, there is no one around," Rome restaurant manager Mario Monfreda said.

Under the government order, all bars and restaurants will now have to close at 6pm.

"It is a total disaster. This will reduce us to nothing ... more people are going to die as a result of the economic crisis that this lockdown is going to cause than the virus itself."

However, the prosperous northern region of Lombardy, centred on Italy's financial capital Milan, called on the government to introduce even more stringent measures.

"I would shut down all the shops. I would certainly close down public transport and I would seek out all businesses that could be shut without creating excessive damage to the economy," Lombardy Governor Attilio Fontana said.

Italy has registered 9172 cases of coronavirus and 463 deaths since February 21, with Lombardy and neighbouring Emilia-Romagna bearing the brunt.

However, the disease has touched most of the country and the government is worried that if it worsens, the health system in the less-developed south will collapse, causing deaths to spike.

Rome landmarks including the Trevi Fountain, the Pantheon and the Spanish Steps were largely empty on Tuesday, while the Vatican closed St Peter's Square and St Peter's Basilica to tourists.

Police told tourists to return to their hotels.

For at least the next three weeks, anyone travelling in Italy will have to carry a document declaring their reasons.

Outdoor events, including sports fixtures, have been suspended and schools and universities are all shut.

A former Treasury chief economist predicted that the lockdown measures were reducing Italy's economic output by around 10-15 per cent, with the tourism and transport sectors down about 90 per cent on their normal levels.

Looking to mitigate the impact on ordinary Italians, the government is considering making banks offer customers a pause in their mortgage repayments.

It also called for the EU to relax its rules to allow more state spending.

"We will ask for the rules to be changed, it is a necessary condition, otherwise people will die," Industry Minister Stefano Patuanelli told Radio Capital.

Australian Associated Press