Visitors were turned away from the hospital yesterday after the restrictions were implemented at 6pm.
Southern District Health Board chairman Pete Hodgson said there had been an outbreak of Covid-19 at the hospital, which was the reason it had to close the doors.
It was similar to what happened at Southland Hospital two weeks ago, where three wards were closed following confirmed cases of Covid-19.
People throughout the hospital were being tested for the virus.
The Southern DHB would hopefully be in a better position to understand the situation tomorrow, he said.
A board spokeswoman said the restrictions were being tightened to protect vulnerable patients, as there was pressure on hospital capacity and an increased risk of Covid-19.
"We understand that this will be distressing for patients and their families," she said.
Visiting was available on compassionate grounds.
Current visiting restrictions remained for all other areas.
Patients to the emergency department and outpatients were allowed one support person, she said.
Security guards were posted at the front door last night and every person entering was stopped and spoken to.
Some were turned away, including Tea Kami, who had travelled from Oamaru to surprise her sister.
Ms Kami arrived at the hospital about 6.05pm.
Her sister had given birth to her first child earlier that day, and Ms Kami left for Dunedin straight after work to see her.
She was able to deliver a bouquet of flowers through the security guards, but was not allowed to enter the hospital.
The sudden change was very frustrating, she said.
She understood hospitals were struggling with Covid-19, but did not think turning away all visitors was justifiable.
"If I had known, I wouldn’t have stopped to get flowers."
She had not seen the announcement, which was made only about two hours before the change was implemented.
The hospital has struggled with capacity throughout the year and last year reached Code Black, a rare situation where patients need to be discharged so new cases can be admitted.
It almost reached that stage again in December.
Staff shortages have been a recurring issue and beds have been going unused periodically because of a lack of nurses.
In February, acute surgery patients had to be transferred to Mercy Hospital when there were no recovery beds for them.
