Services and businesses that have been deemed "essential"- such as gas stations, pharmacies, grocery stores, banks and laundromats-will be allowed to stay open, as well as "law enforcement and offices that provide government programs and services".
California has been among the hardest hit states in the outbreak of COVID-19, with more than 1,000 confirmed cases and at least 18 deaths. The order also prohibits gatherings in enclosed spaces of more than 10 people.
The order takes effect immediately and remains in place "until further notice".
Few pedestrians are seen in the China Town of San Francisco, the United States, March 16, 2020.
"We need to bend the curve in the state of California, and in order to do that, we need to recognize reality", Newsom said during a press conference.
"Californians must have access to such necessities as food, prescriptions, and health care", the order said.
Trump added that the Hanes clothing company was among those that had enlisted to start producing masks, although the company said it would not be the N-95 masks that are more effective in protecting medical workers.
Mr Newsom said the order was essential in light of modelling by experts that showed roughly 56 per cent of the state's residents, or 25 million people, would contract the respiratory illness in the next eight weeks.
On Thursday, Newsom also sent a letter to the leaders of Congress calling for over 1 billion USA dollars in initial federal funding to support the state's coordinated COVID-19 response and pandemic surge planning and implementation.
Still No Virginia Cases Of Coronavirus, But State Prepares For Outbreak
Refers to people within 6 feet or within the room or care area of a confirmed or probable patient for a prolonged period of time . In China - the epicentre of the epidemic - 3,070 have been died so far, while 80,651 have been infected in the country alone.
The Democratic governor said parts of the state were seeing infection rates double every four days.
"If we're to be criticized at this moment, let us be criticized for taking this moment seriously", he wrote.
Of this amount, the state will spend $30 million to lease two medical facilities - Seton Medical Center in Daly City and St. Vincent Medical Center in Los Angeles, Newsom said in a statement.
Newsom announced the order late Thursday just an hour after officials in Los Angeles County, the most populous county in the USA, issued a similar mandate.
The wider US, meanwhile, has 14,250 cases of the virus and 205 deaths, according to a running count being conducted by Johns Hopkins University in Baltimore, Maryland.
The new stay-at-home order is meant to reduce that figure, he said on Thursday.
The order also asks Californians who work in more than a dozen federally-designated "critical infrastructure sectors" - ranging from defense to nuclear reactors - to keep reporting to their jobs. "It's a 'stay at home'".
The order of the county was announced after a second person died for coronavirus in the county Thursday, and an additional 40 cases were reported in the county, bringing the total to 230 patients.