Seven firms say they will impose water restrictions after two unusually dry winters left reservoirs, aquifers and rivers below normal levels.
Southern Water, South East Water, Thames Water, Anglian Water, Sutton and East Surrey, Veolia Central and Veolia South East are to enforce restrictions.
All seven companies said they will impose bans from 5 April.
The drought-affected areas are the south-east of England and East Anglia.
But the Environment Agency (EA) warns in a new report that the drought could spread as far north as East Yorkshire and as far west as the Hampshire-Wiltshire border, if the dry weather continues this spring.
The EA warns that drought conditions are expected to spread across more of England in coming weeks, unless strong rains arrive.
It will also warn of effects on agriculture that could raise prices of potatoes and other vegetables.
It says plans are in place to ensure that the Olympic Games will not be adversely affected, by using water from "sustainable supplies".
"The Olympic Park and other Olympic venues have a high level of resilience to meet their needs even during a drought," says the Agency.
It also added: "The Queen's Diamond Jubilee pageant at the beginning of June will not be affected by the drought."
A ban on hosepipes means they cannot be used on gardens, plants, cars or boats for "recreational use"; to fill or maintain ponds, pools or fountains; and to clean paths, walls, windows or other artificial outdoor surfaces.
People in breach of these terms risk being prosecuted and fined up to £1,000. Watering cans and buckets are still allowed.
Environment Secretary Caroline Spelman said the temporary restrictions would "help protect the public's water supply in the areas most affected by the record low levels of rainfall we have experienced over the last 17 months".
She said: "We can all help reduce the effects of drought by respecting these restrictions and being smarter about how we use water.
"Taking action now to reduce how much water we use will help us all in the future."
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