It comes as Hungary is facing a surge in COVID cases and deaths not seen since May.
Hungary’s government will allow private employers to require that their employees get vaccinated against COVID-19.
The move aims to combat a surge of new infections and deaths due to the coronavirus in the country.
Public employees in state institutions may also need to be vaccinated against the virus, stated Gergely Gulyás, Hungary's minister of the Prime Minister's Office.
But he added that mayors in local municipalities could decide whether to impose the requirement.
Gulyás announced the new measures at a government news conference in Budapest on Thursday, as deaths due to COVID-19 reached their highest level since May.
Facemasks must be worn on Hungarian public transport from Monday, while all non-essential healthcare appointments will be suspended.
Currently, masks are only compulsory in hospitals and residential care homes.
But the option to make COVID-19 jabs mandatory could increase vaccination rates in the country, following a period of stagnation.
Less than 70% of the adult population in Hungary has received a vaccine, compared to the European Union average of 80%.
On Thursday, 4,039 new cases were registered — the highest daily total since mid-April and nearly double the number from a week earlier.