The mass distributions are part of a broader plan to counter the virus' spread that also includes making testing more easily available through more sites and extended hours.
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The state's governor also said an online site would be set up where residents could ask for at-home tests to be sent to them, in targeted ways.
While only a few cases of the omicron variant have been confirmed so far in the city, federal health officials are estimating that it already accounts for around 13% of virus cases in the region that includes New York and New Jersey.
De Blasio said it's clear omicron is "in full force" and spreading.
"This variant moves fast. We need to move faster," the mayor said at a news briefing in Brooklyn.
Dr. Jay Varma, a senior health advisor to the mayor, tweeted Thursday that test positivity has been doubling in the three previous days.
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"Um, we've never seen this before in #NYC," he tweeted.
He went on to say that omicron was evading both vaccine and virus-induced immunity "unlike any variant before."
"That's only explanation for dramatic jump in positivity," he wrote. "Consensus for now (but subject to change) is that immunity *against severe disease* should be far better."
New York state reported nearly 18,300 new cases of the virus Wednesday, the third highest total for any single day since COVID-19 tests became widely available to the public in the spring of 2020. Nearly 83,000 people have tested positive in the seven-day period that ended Wednesday, the most for any such period since last January.
New York City had been mostly spared the worst of the big surge in COVID-19 cases that has taken place across the northeastern and midwestern U.S. since Thanksgiving, but the situation has been changing rapidly in recent days.
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One million N95 masks will be distributed for free through the city's Test & Trace Corps, community based organizations and clinics. The 500,000 free at-home tests will similarly be distributed through community organizations, the mayor said.
The plan also includes beefed-up business inspections to check compliance with the city's vaccine mandates and a media campaign to promote booster shots.
"I do expect cases will continue to increase in the coming days, and this is based on the trajectory that we're following from other countries like South Africa, the United Kingdom and Denmark," City Health Commissioner Dr. Dave Chokshi said.
Chokshi was issuing an updated advisory detailing steps New Yorkers should take to limit the spread of the virus.
De Blasio said it's possible they could alter current plans to allow a crowd into Times Square this New Year's Eve.
Multiple Broadway shows, including "Hamilton," "Mrs. Doubtfire" and "Harry Potter and the Cursed Child," called off performances in recent days because of virus cases in their all-vaccinated casts and crews.
Gov. Kathy Hochul said Thursday an online portal would allow New Yorkers to ask for at-home tests, and that there would be targeting of areas with criteria, such as having the least number of people vaccinated and higher case rates.