The proposed approach would restrict the movement of certain people, with those infected receiving a red code and those under hotel quarantine getting a yellow code.

Mr Lee, who spoke at a regular news conference on Tuesday, said the plan is part of the city's objective to adopt "precise strategies to minimise the scope of restrictions".

"Any measures meant for tackling the epidemic will not be used for other purposes, it is not going to happen,” he said.

Mr Lee, who took over as chief executive on 1 July, has been vocal about taking an intolerant stance on the virus like China's 'zero-COVID' policy.

The city's health code measures are being considered amid an increase in coronavirus infections after the city battled its fifth and worst outbreak that spiked its cumulative numbers to over a million infections and more than 9,000 dead.

However, the planned system has sparked concerns over privacy and social control after Chinese media reported that mainland authorities used its health code system to prevent residents from attending a planned protest at a bank in the province of Henan.

Mr Lee said the health code system is a way of "early identification" of possible infections.

He added that only those infected with COVID and inbound travellers will be restricted by the health codes.

Residents say system is 'massive privacy issue'

However, some Hong Kong residents remain wary about the system.

"This is a massive privacy issue, it's like placing a target on the back of people who receive red or yellow codes," said Wong Wing-tsang, a 33-year-old Hong Kong resident.

"Here, there is still the attitude where people treat those with COVID-19 as outcasts."

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Ms Wong said the system did not seem to be particularly comprehensive, especially if those who are infected with COVID decide not to self-report their symptoms.

Hong Kong recorded more than 2,700 cases on Tuesday and the city has on average logged more than a thousand infections daily since mid-June.

Hong Kong remains one of the few places, together with mainland China, to maintain restrictions such as a mandatory quarantine period as much of the world has opened up.