Authorities will suspend flights and trains out of the Chinese city , saying residents should not leave without a special reason.
The move is meant to "resolutely contain the momentum of the epidemic spreading" and protect lives, Wuhan's special command centre against the virus said, according to state broadcaster CCTV.
Earlier, Wuhan cancelled major Lunar New Year events as medical staff handled patients in full-body protective suits and officials used fever scanners to screen travellers.
The World Health Organisation announced on Wednesday it had decided to extend by a day emergency talks on the deadly - postponing its decision on whether to declare a global public health emergency.
Travelers at Hankou Railway Station in Wuhan in southern China's Hubei province, Tuesday, Jan. 21, 2020. Source: AP
"The decision about whether or not to declare a public health emergency of international concern is one I take extremely seriously and one I am only prepared to make with appropriate consideration of the available evidence," WHO chief Tedros Adhanom Ghebreyesus told reporters.
The coronavirus has spread across China and beyond, with 17 people killed and over 500 confirmed infected in an outbreak that started in the central city of Wuhan - described by state media as "the main battlefield" against the disease.
The virus is spreading just as hundreds of millions of people are travelling in packed trains, planes and buses across China to gather with friends and family for the Lunar New Year holiday, which starts Friday.
Wuhan's mayor Zhou Xianwang urged residents to not leave the city and visitors to avoid it so that the possibility of transmission can be reduced.
"If it's not necessary, we suggest that people don't come to Wuhan," Mr Zhou told state broadcaster CCTV.
National Health Commission vice-minister Li Bin added his voice to calls to avoid the city, saying Wednesday it was best "that people do not visit Wuhan unless needed and for Wuhan residents not to leave the area".
Wuhan has 11 million inhabitants and is a major transport hub.
Outside mainland China, cases have been detected in , the United States, Thailand, Japan, Macau and South Korea.
Australian concerns
Health screenings are being ramped up at Australian airports as a Brisbane man suspected of having the disease is released from isolation.
Queensland Health confirmed on Wednesday the man does not have the deadly illness.
The man who was placed in isolation at his home flew into Brisbane earlier in January after visiting family in Wuhan, where the virus broke out in December.
A number of Australians have been tested for the deadly coronavirus but there are still no confirmed cases.
Prime Minister Scott Morrison says Australians should be alert but not alarmed by the "evolving situation".
Travelers arrive at Tom Bradey International Terminal in Los Angeles, California. Source: AAP
Biosecurity measures are in place and the three flights Australia receives from Wuhan each week would be closely monitored, says Mr Morrison.
He said the Department of Foreign Affairs and Trade has raised the level of its travel advisory for Wuhan to recommending travellers exercise a high degree of caution while in the city.
"I'm advised by the Chief Medical Officer the risk of transmission in Australia remains low, however, the situation is evolving," Mr Morrison said on Twitter.
He said a national response centre is online and coordinating a response with federal, states and territory health experts.
"We are prepared to deal with this situation," he said.
Biosecurity measures ramped up
Biosecurity measures have been ramped up for flights into the country from China, and the city of Wuhan in particular.
"A number of people have been tested in Australia and found to be negative," federal Health Minister Greg Hunt told Sky News on Wednesday.
Australia receives three flights from Wuhan per week which would be monitored closely, he said.
"(Flights) will be met by biosecurity officers, information given to passengers and the biosecurity officers will be accompanied by health officers," Mr Hunt told the ABC.
Travelers arrive at Tom Bradey International Terminal in Los Angeles. Source: AAP
"They do have the capacity because of the measures taken to bring people directly to hospital if that were required.
"But we expect that any passengers that do have issues will self-report because it's in their own interests but if not, then there are strong powers."
Biosecurity staff have been stationed at Sydney airport to meet the three direct flights a week from Wuhan to Sydney.
Medical staff in protective outfits take precautions with patients at Kwong Wah Hospital in Yau Ma Tei. Source: AAP
Written information will be provided to passengers onboard flights from Wuhan, explaining the symptoms of coronaviruses, which can include a high fever. 
Earlier, chief medical officer Brendan Murphy told reporters the risk posed to Australians by the new strain was low.
Prime Minister Scott Morrison. Source: AAP
Biosecurity staff have been stationed at Sydney airport to meet the three direct flights a week from Wuhan to Sydney.
Written information will be provided to passengers onboard flights from Wuhan, explaining the symptoms of coronavirus which includes a high fever.
But Professor Murphy said it was not necessary to screen people for temperature which he said he proved unreliable in the past.
"They missed a large number of cases," he said.
At Sydney International airport, many travellers flying to the city of Tianjin in China on Tuesday, were not too concerned about the outbreak.
At least four people have been killed by the new strain of coronavirus. Source: AAP
Shuo told SBS News she was travelling to visit her family in the southern city of Guangzhou.
“Actually my father works in hospital and he told me it's not that serious."
Fellow flyer Daniel, who is visiting family in China to celebrate Lunar New Year, had confidence authorities would handle it.
“Not actually, because we have experience controlling the SARS, so I'm pretty confident in controlling this time,” he said.
"[I am] a bit concerned, but I think with the proper measures - I think that can be controlled, probably."
Additional reporting: AAP, AFP
