WELLINGTON (BLOOMBERG) - Auckland's three-day lockdown will end on Wednesday (Feb 17) night after authorities expressed confidence that the latest community outbreak of Covid-19 is small and contained.

Auckland will move to Alert Level 2 at midnight on Wednesday, allowing schools and businesses to reopen, Prime Minister Jacinda Ardern said after a Cabinet meeting.

The remainder of New Zealand will move to Level 1, meaning people no longer have to observe social distancing or limit the size of gatherings.

The easing of restrictions comes even as health officials today reported that three further people have tested positive for the virus, which has been confirmed as the more virulent UL strain.

They are all connected to the initial three positive cases that prompted the government to put Auckland into lockdown from midnight Sunday.

It remains unclear how those three people, who are family members, became infected.

"Apart from the cases which have emerged today, all results of close contacts with the initial three cases have come back negative," Ardern said. "What this tells us is that we don't have a widespread outbreak but rather a small chain of transmission which is manageable."

Auckland's Level 2 setting means social distancing is still required and gatherings are limited to 100. The government will review the city's alert level on Monday.

When the pandemic hit almost a year ago, New Zealand succeeded in eliminating the virus from the community with a strict nationwide lockdown.

Since then it has managed to catch infections at the border, which remains closed to foreigners, and combat sporadic community outbreaks. This was Auckland's second regional lockdown.

New Zealand has recorded a total of 1,984 confirmed coronavirus cases and 26 deaths.