The country is experiencing a spike in Covid cases in various regions, with chancellor Angela Merkel describing this fourth wave as “dramatic”.
Bavaria announced the market closures, which will affect towns such as Munich and Nuremberg, on Friday, with state premier Markus Söder saying: “The situation is very, very serious and difficult.
“We have a clear goal: fighting corona, protecting people and protecting the health care system.”
This affects popular Christmas markets including ones in Dresden and Görlitz.
The state has also announced regional lockdowns for all districts with a seven-day COVID incidence rate of over 1,000 per 100,000 people.
In Saxony, a wider set of restrictions was announced on Friday that includes closing Christmas markets along with all sporting and cultural venues, as well as banning tourism, public consumption of alcohol and barring the unvaccinated from non-essential shops and hairdressers.
There is also a state-wide curfew across two districts in Saxony, with locals unable to go out and venues unable to open between 10pm and 6am.
The restrictions will remain in place until at least 12 December.
“The measures are tough but necessary,” said Saxony premier Michael Kretschmer, in order to “break the wave” of Covid infections.
The two were the first to impose a state-wide restriction on the festive markets, which attract thousands to Germany’s towns each year – previously, only individual markets such as Berlin’s Charlottenberg Palace and Munich’s Marienplatz market had taken the decision to close for the second year running.
Germany is currently seeing a weekly incidence rate of around 340.7 recorded infections per 100,000 people, according to the Robert Koch Institute health agency.
But the figure is far higher in Saxony, which recorded 593.6 infections on Friday, while Bavaria saw 625.3.