The measures are Biden's latest attempt to spur reluctant Americans to get vaccinated as the Delta variant of the coronavirus surges nationwide, infecting unvaccinated people in particular.
Biden's decision to require millions of federal workers and contractors to show proof of vaccination is a departure from a previous opposition to so-called vaccine passports.
It shows the White House taking a tougher stance towards circumstances within Biden's control as the virus spreads.
The federal government is the largest employer in the United States and Biden's move could serve as an example for private businesses and other institutions to follow as they assess getting workers back into offices and work places.
Government employees who do not show they have been vaccinated will be subject to weekly or twice-weekly COVID-19 tests and restrictions on official travel.
Meanwhile state, local and U.S. territorial governments will be able to dip into $350 billion in coronavirus aid to provide $100 payments for every newly vaccinated American to boost COVID-19 inoculation rates, the U.S. Treasury Department said.