Malaysia recorded its highest number of daily coronavirus cases on Sunday, at 6,976.
The government has decided to tighten restrictions in response to the spike.
The new measures include having 80 percent of government workers and 40 percent of those in the private sector work from home. Public transportation capacity will be halved, and running hours cut. The rules will be in effect from Tuesday through June 7.
Malaysia imposed a nationwide lockdown earlier this month. Schools are closed, and people are banned from traveling between states and districts.
Prime Minister Muhyiddin Yassin explained in an interview aired by the state broadcaster on Sunday that the country's economy could collapse if the government enforced a total lockdown, with all economic sectors shut down.
Muhyiddin said the country cannot afford to finance measures that would be needed to support the public and keep the economy afloat in a hard lockdown.
Malaysia has confirmed over 510,000 coronavirus infections so far. Daily cases have topped 6,000 on each of the past six days.