Mr Hancock said "households gathering and not abiding by the social distancing rules" was a reason for the stricter rules and it was in order to "keep the country safe".
He said: "We take this action with a heavy heart but unfortunately it's necessary because we've seen that households meeting up and a lack of social distancing is one of the causes of this rising rate of coronavirus and we'll do whatever is necessary to keep the country safe."
Mr Hancock added: "We're constantly vigilant and we've been looking at the data, and unfortunately we've seen across parts of northern England an increase in the number of cases of coronavirus.
"So, today, I held a meeting of the Government's Gold Committee and working with local leaders, including, for instance, Andy Burnham the mayor of Greater Manchester, we've decided that we need to take action across Greater Manchester, East Lancashire and parts of West Yorkshire.
"So, from midnight tonight (Friday) we are banning households meeting up indoors."
The new restrictions apply to the whole of Greater Manchester, parts of East Lancashire including Blackburn with Darwen, Burnley, Hyndburn, Pendle, Rossendale and parts of West Yorkshire including Bradford, Calderdale and Kirklees.
The same restrictions will also apply to Leicester, which saw the first so-called "local lockdown" imposed on June 29.