Madeira, an autonomous region of Portugal, said it would limit the number of people allowed to enter its islands to 100 per week from Tuesday onwards, with freed up hotel space used to quarantine people with symptoms of coronavirus.
A total of 34 confirmed cases have been reported on Madeira, four islands off the northwest coast of Africa home to 270,000 people and usually visited by a million tourists each year.
Portugal has confirmed 5,962 cases and 119 deaths, far below neighbouring Spain.
Four major hotels which would otherwise be filling up with holidaymakers over the Easter break will now be used to quarantine people displaying symptoms of the COVID-19 virus.
The 100 passengers allowed must remain in quarantine for 14 days, the regional government said.
Portugal suspended flights to and from Italy in early March and restricted tourism across the land border with Spain, though free movement of goods is still guaranteed.
Flights to and from countries outside the bloc were suspended on 19 March, with the exception of Canada, the United States, Venezuela, South Africa, and Brazil, which have large Portuguese diasporas.