Schools and non-essential services will shut down for the next four weeks as the country enters level four Covid-19 alert in the next 48 hours.

Prime Minister Jacinda Ardern announced the alert raised to level 3 tomorrow and level 4 in the next 48 hours which would be in place for at least four weeks.

The changes were announced at a post-Cabinet press conference on Monday March 23.

"Right now, we have a window of opportunity to break the chain of transmission, to contain the virus, to stop it multiplying and to protect New Zealanders from the worst".

"We can stop the spread by staying at home and reducing contact," the Prime Minister said.

Schools and early childhood services will be closing from tomorrow, except for those people who work in identified essential services and have children at schools.

Minister of Education Chris Hipkins said tertiary institutions will close as soon as possible.

"Funding for all educational providers will continue to flow as normal," Hipkins said.

"Funding for early childhood and tertiary providers will not be cut or clawed back based on non-attendance".

"Distance learning may continue to be provided where it can be done consistent with self-isolation," he said.

President of the New Zealand Principals' Federation (NZPF), Perry Rush, of Hastings Intermediate said the announcement was good.

"The clear direction from [the] Government has been welcomed. We are always in the position of wanting to take official advice.

"The Prime Minister has acted decisively and that certainly resolves the way forward for schools currently.

"We know it's not going to be easy, it's certainly stressful but it's an appropriate call so we are in behind the government on this one"

Rush said schools were "really well prepared".

"Schools have certainly been working hard over last two weeks to put in place appropriate planning," he said.

Earlier in the day Rush had estimated between 25 and 40 per cent of students were currently not attending school and stood by the parents' decision to do so.

About 1000 school students in Hawke's Bay had to find a new way of getting to school on Monday morning after a local bus company cut its services because many of its staff are in self-isolation.

Nimon and Sons Ltd General Manager Katie Nimon said more than half of its driving staff were either over 70 or had vulnerable health.

She said that they have 27 drivers in self-isolation including some drivers that operated while the cruise ship Ruby Princess visited Napier Port on 1March 15, but could not confirm how many worked with the cruise ship.

It meant they were forced to close services to 14 schools.

The affected schools have been notified, and have been getting in contact with parents.

"All schools have been really understanding and know that the driver's health and wellbeing is important."