From 12pm local time on Wednesday, residents in Auckland will move back under Level 3 restrictions, the second harshest available.
The four new cases are linked to more than one workplace and may have spread to multiple suburbs, Ms Ardern said. The patients had no history of overseas travel or links to hotel quarantine facilities.
“I know that this information will be very difficult to receive,” Ms Ardern said.
“We have also been here before … if we have a plan and stick to it, we can work our way through difficult and unknown situations.”
Under the Level 3 restrictions, which will be in place until at least midnight on Friday, non-essential workers will have to work from home, with restaurants, bars and public facilities closed.
Schools will also shut to children of non-essential workers and gathering limits will apply to weddings and funerals.
The rest of the country will also move to Level 2 restrictions, with mass gatherings limited to 100 people.
Travel to Auckland from other areas will also be banned.
"Moving an entire city, and New Zealand's largest city, into Level 3 restrictions is not a decision we take lightly,” Ms Ardern said.
“This move means that we can be cautious, but also make sure that we have more information before we make any decisions that have a longer-term impact.
"Together we've beaten the virus before and with fast action and by acting together, we can beat it again. We have come too far to go backwards.”
Panic buying breaks out in Auckland following lockdown announcement
Ashley Bloomfield, the chief executive of New Zealand's Ministry of Health, said while the new cases were concerning the country was "well-prepared" to fight them.
“We have been saying for some weeks that it was inevitable that New Zealand would get another case of community transmission,” he said.
“That time is now and the health system is well-prepared.”
Shortly after the announcement, Auckland Mayor Phil Goff urged residents to do the right thing.
"Please remain calm, please do not panic buy and please follow the lockdown rules," he tweeted.
The new cases come around a month out from New Zealand's election day.
The New Zealand First party, led by Deputy Prime Minister Winston Peters, suspended its campaign following the announcement.
People in Australia must stay at least 1.5 metres away from others. Check your state’s restrictions on gathering limits.
If you are experiencing cold or flu symptoms, stay home and arrange a test by calling your doctor or contact the Coronavirus Health Information Hotline on 1800 020 080.
News and information is available in 63 languages at sbs.com.au/coronavirus.