The decision will affect Barnsley, Doncaster, Rotherham and Sheffield, and come into force at midnight on Saturday (24 October).
Sheffield City Region's metro mayor Dan Jarvis confirmed the decision this morning (21 October), saying local leaders had secured £41m of funding from the Government 'to support people and businesses' hit by the lockdown.
Under Tier 3, the majority of pubs and bars will be ordered to close and social mixing between households will be banned indoors and outdoors.
However, restaurants and any pubs or bars that are able to 'operate as if they were a restaurant' and serve 'substantial' meals will be allowed to remain open.
According to the real estate adviser Altus Group, up to 939 pubs and 14 wine bars across the Sheffield City Region will have to close as a result of the restrictions.
Sheffield City Region will become the third area in the UK, after the Liverpool City Region and Lancashire, to move into the 'very high' risk tier willingly, having secured a package of support from the Government.
Yesterday (20 October), Greater Manchester became the first region in the UK to have Tier 3 restrictions forced upon it, after talks between Westminster and local leaders on a financial support package ended dramatically without a deal reached.
Greater Manchester Mayor Andy Burnham said he was demanding £65m in financial support as a 'bare minimum' to top up the furlough pay of workers whose businesses are shutdown as a result of the lockdown.
The Government has announced it will make a further wave of furlough support available, which will cover two thirds of workers’ wages up to £2,100, but this has been slammed by both industry voices and Conservative MPs for not going far enough to protect those on minimum wage.
Burnham accused the Government of 'walking away' from the talks having had its offer of giving the region's leaders £60m rejected.
"This is no way to run the country in a national crisis," he said.
Prime Minister Boris Johnson confirmed that region will receive £22m in support, although this is a baseline per head figure for Tier 3 areas to help with Test and Trace and enforcement of restrictions.
The Prime Minister failed to say whether any extra support for businesses would be forthcoming, but Downing Street has since confirmed that the £60m offered today does remain on the table, subject to discussions.
Greater Manchester's Coronavirus alert level will be raised to 'very high' from Friday (23 October).