Chief Minister Arvind Kejriwal also banned construction and demolition work for five days and the use of diesel-run generator sets for 10 days in a desperate bid to control a crisis that has choked Delhi.
The school closure is aimed at preventing children from getting affected by the dangerous pollution levels which have forced people to use surgical masks while travelling in the city.
But Kejriwal maintained that this was a larger problem involving neighbouring states, where farmers are said to be burning crop stubble in a wide area, and sought the central government's intervention.
"This is the time to set aside politics and find a solution (to the problem)," Kejriwal said after presiding over an emergency meeting of his cabinet.
"The base level of pollution was already very high. We have consulted experts and we are taking some emergency measures," the Aam Aadmi Party leader told reporters.
Kejriwal said the coal-based thermal power plant at Badarpur in south Delhi, which generates fly ash, would be shut for 10 days. Water would be sprinkled on the fly ash scattered within the plant.
Water would also be sprinkled on the city's roads on a large scale and vacuum cleaning would begin from November 10 in all 100-foot broad roads maintained by the Public Works Department (PWD), he added.
With high levels of PM 2.5, the pollution crisis in Delhi continues to be classified as "severe", with a blanket of smog covering the entire city as well as neighbouring states.
Delhi's pollution levels worsened after Diwali on October 30.
Delhi's dismal air quality has been attributed to low wind speed and high humidity which has blocked dispersal of pollutants.
The Chief Minister announced that in order to do away with the dependence on generator sets, electricity connections would be given to whoever asks for them. Hospitals and emergency services can, however, use generator sets.
He announced a strict enforcement of the ban on burning of trash and dry leaves, saying residents who see violations can report to the government on an app to be unveiled on Monday.
And where this takes place, the sanitary inspector and other officers would be penalised.
The municipal authorities have been told to bring under control the fire at the land fill sites in Delhi.
Holding crop stubble burning in neighbouring states as a major contributor to the smog, Kejriwal urged the authorities to provide incentives to farmers so that they desisted from doing so.
Kejriwal also appealed to people to remain indoors as much as possible and said the odd-even transport system may make a comeback.
"Please stay indoors and try to work from home as much as possible."
Under the odd-even scheme, implemented twice earlier, vehicles with odd registration number would alone ply on odd dates and those with even registration number on even dates.
The Delhi government was also analysing the possibility of inducing artificial rains to control pollution but this would need to be discussed with experts and the central government, Kejriwal said.
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Delhi Environment Minister Imran Hussain, AAP’s Kapil Mishra and Dy CM Manish Sisodia reached the CM Arvind Kejriwal’s residence to take part in the meeting on pollution on Sunday.
The level of air pollution has crossed 999 in Delhi. It’s equal to smoking 44 cigarettes.