The coastal city of Zhuhai, which borders the gambling hub Macau, said late Friday Omicron had been detected in one mildly ill and six asymptomatic patients, after launching mass testing due to a case in a neighbouring city.
China is battling a spate of coronavirus outbreaks, including several from the Omicron variant, as the country steps up vigilance against the virus ahead of the Beijing Winter Olympics next month.
Millions of people across the country have been ordered to stay home in recent weeks, with scores of domestic flights cancelled and factories shut down.
Zhuhai officials have asked residents to avoid leaving the city "unless necessary", with those who are required to show negative Covid test results within the past 24 hours.
The city had launched mass testing for its population of 2.4 million people on Friday after a Covid case was detected in neighbouring Zhongshan earlier in the week.
Businesses including beauty salons, card rooms, gyms and cinemas were ordered to close on Thursday, with officials announcing the suspension of public bus routes in parts of the city.
China has kept Covid-19 cases relatively low throughout the pandemic with its zero-tolerance strategy of immediately ordering mass testing and strict lockdowns when infections are detected.
But the fast-spreading Omicron variant has tested that strategy in recent weeks, appearing in the port city of Tianjin close to Beijing before spreading to the central city of Anyang.
National Health Commission spokesman Mi Feng told reporters on Saturday that the country faced a "twofold challenge" from both the Delta and Omicron strains of the virus.
He warned that regions that had not yet seen outbreaks "must not relax" their prevention measures and "strengthen risk auditing".
The country reported 104 domestically transmitted Covid-19 cases on Saturday.
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