Pollution levels dropped marginally earlier this week, but the Air Quality Index (AQI) on Thursday touched 393 on a scale of 500, indicating risks of respiratory illness from prolonged exposure.
Government offices are also set to open from next week but state employees have been instructed to use public transport and government-run feeder buses, according to the Delhi government.
A ban on the entry of diesel trucks with non-essential goods would continue, the government said, with only natural gas and and electric powered vehicles allowed into the teeming city of more than 20 million people.
The Delhi government has hired an extra 700 CNG buses to encourage people to use public transport. And a ban on construction has been reimposed to curb dust, a major source of pollution.
Delhi's foul air is putting more children in hospital with breathing problems, raising concerns among parents.
As part of its efforts to combat pollution, the government has already shut five power stations on Delhi's outskirts.