Sweden's government is implementing tougher COVID-19 restrictions as the country battles a second wave of the virus.

The country had until now taken a controversial 'herd immunity' approach to tackling coronavirus, hoping enough people will catch the virus so it can't be transmitted as easily.

While neighbouring nations have been in strict lockdowns, Sweden has relied on recommendations to residents to wash their hands, keep a distance, and work from home. 

The country has so far recorded 177,355 cases of COVID-19 and 6164 deaths, according to Worldometer's coronavirus tracker.

But recently Sweden's cases, hospitalisations and deaths have all increased rapidly.

Björn Eriksson, the director of health and medical care services for Stockholm, told news outlet SVT that they "consider the situation extremely serious".

On Monday, Sweden's Prime Minister Stefan Löfven said the situation is "going to get worse" and announced limits on public gatherings would be cut from 50 people to eight.

The new restrictions will apply to public gatherings including concerts, lectures and theatre performances, but not to private gatherings. 

"It is a clear and sharp signal to every person in our country as to what applies in the future. Don't go to the gym, don't go to the library, don't have dinner out, don't have parties - cancel!" he said during a press conference.

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Löfven called the ban on large public gatherings a "new normal".

"Advice and recommendations went a long way this spring, but now compliance [with them] is lower," he said, as quoted by the Financial Times. "Now more of a ban is needed to bring down the curve of the number infected." 

This comes after Sweden last week banned the serving of alcohol after 10pm and local areas have implemented their own recommendations to avoid public transport and shops across the country.

Löfven said this would be a "testing time" for Swedes.

"It is about your and my choices every day, every hour, every moment that will determine how we manage this. So make the right choice for yourself, for society, and for Sweden." 

The country's cases per capita are currently 10 times higher than Finland and four times higher than Norway, the Financial Times reported.

After several months of relatively low numbers of deaths, Sweden reported more than 100 in three days last week.

Data from the European Centre for Disease Prevention and Control suggests the country's rise in hospitalisations in recent weeks may also be Europe's fastest.