The unusual decision comes amid a wave of Palestinian knife, gun and car-ramming attacks since October and will keep out tens of thousands of Palestinian workers.
The order preventing Palestinians from crossing into Israel from the West Bank was put in place overnight, with the Jewish festival of Purim set to begin Wednesday evening.
An army spokeswoman said the measure was taken on orders from the government following an "evaluation of the situation," without providing further details.
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Exceptions will be made for humanitarian and medical cases, the spokeswoman said.
Purim sees street parades and an increase in the number of Jewish faithful visiting the Western Wall in Jerusalem's Old City.
Israel has regularly closed off the West Bank during Jewish holidays such as Passover and Yom Kippur, though less often for Purim.
Violence since October has killed 198 Palestinians, 28 Israelis, two Americans, an Eritrean and a Sudanese.
Most of the Palestinians killed were carrying out attacks, according to Israeli authorities. Others were shot dead during protests and clashes, while some were killed in Israeli air raids in Gaza.