10% of all new cases of Covid-19 in the country have been in the East Midlands town.
The shadow health secretary told MPs in the Commons: "People in Leicester were concerned, anxious and scared to read in the newspapers and see on the TV screens yesterday news that we were going into some form of lockdown based on anonymous briefings".
Speaking in the House of Commons late on Monday, Mr Hancock announced that further measures in Leicester will be put in place to help tackle the outbreak, including the setting up of a walk-in testing centre for those with coronavirus symptoms.
He said in order to control the virus "it requires sacrifices by everybody, we need to do that in Leicester now".
"We've decided that from tomorrow, non-essential retail will have to close".
Pubs, restaurants, cafes, hairdressers and barbers will remain shut, with people advised against all but essential travel.More news: Adele Wears 2016 Glastonbury Dress As She Watches Her Performance At Home
Leicester will be the first area in the United Kingdom to go into a local lockdown.
Schools will close to most pupils from Thursday as part of restrictions imposed.
The number of coronavirus cases in Leicester is now three times higher than the second highest city in the UK.
"We do not take these decisions lightly but with the interests of the people of Leicester in our hearts".
He said the lockdown would be reviewed in two weeks.
It is not a small ask of the people of Leicester, a major city, to watch the rest of the country progress, while they have to go into reverse for now, to protect everyone's health.More news: Impossible Foods Partners with Starbucks; Rolls Out New Product
The people of Leicester will have to go back to an earlier stage of lockdown.
Concerns over Leicester have mounted in recent days following the increase in cases, though there has been some confusion as to the government's intentions following a weekend of mixed messages that appeared to come as a surprise to local officials.
Hancock said the government was still analyzing the exact reasons behind the rise of cases in Leicester. The government, which sets the coronavirus response for England, has said it won't hesitate to reimpose lockdown restrictions on a specific region in the event of a local outbreak.
"It took a long time for information about the scale of that hotspot to actually be communicated to the local authorities in Leicester", she told Sky News.
"I want to stress to people that we are not out of the woods yet".More news: Kings looking into whether Jabari Parker broke coronavirus rule