Authorities reported more than 7,000 new infections nationwide on Friday, the third record number of daily infections in a week.
The center of the normally bustling capital was empty and shops closed when the closure took effect, although people could still be seen on the streets outside the city.
“I think the people in Hanoi and I agree with the city’s sudden decision to close the city,” said local resident Nguyen Van Chien.
“We have to take economic risks to combat the pandemic,” he added.
After successfully containing limited coronavirus outbreaks last year, Vietnam has seen cases skyrocket since late April.
About a third of Vietnam’s 100 million people are already subject to closure orders.
But the outbreak has shown few signs of slowing down and Ho Chi Minh City’s southern shopping center, which has recorded the most recent cases, extended its stay-at-home order on Friday.
“I’ve been inside for a month. The situation in our city is terrifying,” resident Le Bich Thanh told AFP.
Authorities launched a campaign to disinfect the entire city, which they say will take a week.
Vietnam was one of the few economies that expanded last year due to its success in containing the virus during the first wave of the pandemic.
But the Southeast Asian country has been slow to acquire and administer vaccines, with only nearly 4.5 million doses administered so far.
It is also developing its own vaccines and authorities say they hope to achieve herd immunity by early 2022.
Vietnam has a policy of hospitalizing all carriers of the virus, putting medical workers and hospitals under great pressure, although the rule has been lifted in some areas.