The decision was not unexpected, as both the mayor and Governor Andrew Cuomo spoke of the possible pause earlier this week.
"Indoors is the problem," de Blasio said.
Instead, the mayor said the city would "double down" on outdoor dining for restaurants, 6,600 of which have already taken advantage of additional space on sidewalks and streets.
"Outdoors is where we need to be to the maximum extent possible," de Blasio said.
WATCH: Gov. Cuomo discusses decision to delay indoor dining in NYC
Cuomo said he is concerned about a spike in COVID-19 cases after other states opened up and restaurants failed to adhere to mask and social distancing standards.
The concern is that circulating air conditioning may spread the virus, and Cuomo sent a team to New York City Tuesday night to monitor conditions.
"I'm trying to gauge how bad the non-compliance is," Cuomo said. "I don't want to be a hard edge, but it's the law."
Andrew Rigie, of the NYC Hospitality Alliance, said the city can't be in a position where "all of sudden small businesses are going to hire people back, start serving in the dining room and then get shut down again."
Now, thousands of restaurant owners are constructing makeshift platforms for outdoor dining and spending money they don't have to bring in business they desperately need.
Over the past two weeks, tables have been perched precariously near traffic as city regulators made up new rules on the fly. On Wednesday, they released formal guidelines for outdoor design.
Right now all restaurant owners can do is try to turn as many tables as they can, but if it starts to rain, all bets are off. An no one is talking about what will happen if this isn't resolved before it turns cold again.
New York City beaches, however, are officially open for swimming, though riptide warnings meant many beachgoers were forced to avoid the water.
Lifeguards are back to duty on city beaches, as well as federally-run beaches like Jacob Riis Park in Far Rockaway.
New York City is planning to open three pools by July 24 and 12 more across the boroughs by August 1.
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