Travellers entering Britain from the country will have to quarantine for 14 days from midnight, the Government has announced.
The Foreign Office now warns against “all but essential travel to Luxembourg”.
The travel advice was updated for the whole of the UK on Thursday evening, following an earlier decision by the Scottish Government.
A rise in Covid-19 cases means Luxembourg has been taken off the list of countries exempt from quarantine measures, the UK Government said.
Transport Secretary Grant Shapps announced the changes in a tweet on Thursday.
“Unfortunately the latest Luxembourg data shows an increase in #COVID19 cases meaning the country will be removed from the travel exemptions list,” he said. “
Anyone arriving to any part of the UK from midnight tonight will therefore need to quarantine.”
The Government said data from the Joint Biosecurity Centre and Public Health England indicates a “significant change in both the level and pace of confirmed cases of coronavirus in Luxembourg”.
The small landlocked European country has seen a “consistent increase in Covid-19 cases per 100,000 of the population since the end of June, with over a tenfold increase in total cases over this time period”.
The imposition of quarantine measures follows a similar decision to remove the so-called “air bridge” travel corridor with Spain on Saturday night.
The measures for Luxembourg will come into force from midnight on Friday, having been announced only hours before.
The Scottish Government’s Justice Secretary Humza Yousaf said: “This decision is based on the latest available data from the Joint Biosecurity Centre and it gives another clear indication that the virus is active and still spreading.
“We have always maintained that we are closely monitoring the pandemic situation in all countries and we will impose quarantine requirements as necessary in a bid to protect the public.
“This virus is showing a resurgence in areas and it should not be forgotten how deadly it remains.
“Our priority to is suppress the virus, prevent it from being transmitted and protecting public health.”
The DfT said: “Data from the Joint Biosecurity Centre and Public Health England has indicated a significant change in both the level and pace of confirmed cases of coronavirus in Luxembourg.
“There has been a consistent increase in Covid-19 cases per 100,000 of the population in Luxembourg since the end of June, with over a tenfold increase in total cases over this time period.
“As a result, ministers took the decision to remove Luxembourg from the travel corridor list of countries from which people arriving in the UK do not have to self-isolate.”
It added: “The Government has made consistently clear it will take decisive action if necessary to contain the virus, including removing countries rapidly if the public health risk of people returning from a particular country and not self-isolating becomes too high.”