In response, the government said it would implement emergency measures, blocking access to around a dozen towns at the centre of the crisis, forcibly confining tens of thousands of people who live there.

The objective "is to isolate the contagion as much possible within a limited area", Health Minister Roberto Speranza said after an emergency cabinet meeting in Rome on Saturday.

Prime Minister Giuseppe Conte said police or the army would be used if necessary to stop people leaving or entering the confined areas.

The measure would affect ten municipalities about 60 kilometres southeast of Milan - where around 50,000 people live - and Vo', a town of 3000 in the neighbouring Veneto region.

"The aim is to protect the health of the Italian people," Conte said.

The head of the Civil Protection Agency, Angelo Borrelli, said the number of contagions in the last few days had risen to 79, including the two dead.

There were 54 cases in Lombardy, the region comprising Milan, and 17 in eastern neighbour Veneto, as well as two in Emilia-Romagna to the south and one in Piedmont to the west.

The Italian government also decided to cancel all sports events in Lombardy and Veneto on Sunday, a decision which will affect three Serie A football games including the clash between Inter and Sampdoria which was due to be played in Milan.

According to a bulletin from the World Health Organisation, no other country in Europe has more coronavirus cases than Italy. Germany had 16, France 12, with one dead, and Britain nine.

Italian authorities are still unsure how the outbreak, which has killed a 78-year-old man in Vo' and a 77-year-old woman in Lombardy's Lodi province, started.

The man died on Friday, while the woman passed away at home on Thursday. Post-mortem tests showed she had the virus, though it is not clear whether it was the ultimate cause of her death.

The first contagion was confirmed in Codogno, in the Lodi area, late on Thursday, on a 38-year-old Italian man hospitalised with pneumonia on Wednesday.

He passed on the virus to dozens of doctors, nurses and patients. Nearly all of the infections in Lombardy were traced back to the Codogno hospital.

Having no obvious connection to China, the 38-year-old was not immediately tested for Covid-19. After his condition worsened, his wife said he spent time with a friend who had returned from China.

However, that man tested negative for the virus and further tests revealed on Saturday that he was never infected, thus ruling him out as the originator of the contagion.

In Vo', a working hypothesis was that the virus arrived via eight Chinese businessmen working in the area. They were taken to a hospital for tests.

Before the government decided to confine the infected areas, they were already under a lockdown regime, with schools and most shops and businesses shut.

Regional authorities urged people to stay at home, and public events - including church services, carnival parties and sports events - were banned.

In Milan, designer Giorgio Armani told the ANSA news agency that his Sunday show, part of the city's fashion week, would be held in an empty theatre and shown livestreamed to minimise contagion risks.

Also, organisers of a major trade fair for eyewear, MIDO, postponed the February 29-March 2 show to late May or early June, also due to public health concerns.

Veneto President Luca Zaia said universities in his region would be closed next week, but said a decision was still pending on whether to call off Venice's famous carnival, which runs until Tuesday.

Bigger towns near the Lombardy epicentre also suspended public events and closed schools, such as Cremona, which has 71,000 residents, and Piacenza with 100,000.

Australian Associated Press