Tropical Cyclone Freda has struck the Solomon Islands, bringing heavy rains and winds of up to 130 kilometres per hour.
Witnesses say roofs have been ripped off houses and trees have been flattened, while rising rivers caused flooding in some areas.
There are no reports of deaths or injuries.
Sajay Prakesh of the Nadi Tropical Cyclone Centre in Fiji said although the cyclone was moving away, parts of the Solomon Islands were being hit by "very strong winds and heavy rain".
"Cyclone Freda is now a category two cyclone and it is continuing to intensify," he said on Saturday afternoon.
"It will become category-three by midnight tonight, having very destructive winds."
Coastal and low-lying areas are at risk of inundation and fishermen have been advised to stay away from the sea.
Matthew Bass from the Bureau of Meteorology in Brisbane says Freda is no longer expected to hit Vanuatu and New Caledonia in the coming days.
"At this stage it's expected to maintain a reasonably southerly path and with that it isn't directly expected to affect Vanuatu in the next couple of days," he said.
"At this stage around New Year's we're expecting it to be quite far from New Caledonia, still to the north-east of the islands."
Freda comes just weeks after Cyclone Evan killed at least five people in Samoa before destroying homes and stranding thousands of tourists in Fiji.
Queensland weather forecaster Peter Otto says the Freda is about 1,300 kilometres from the Australian coast.
"This cyclone is expected to stay way off the eastern Australian coast for the next several days and the only impact we can see in the near future is the possibility of waves increasing into the early part of next week, but that's a long way off," he said.
Meanwhile, the weather bureau says a cyclone off Western Australia is unlikely to reach the coast.
Category-one Cyclone Mitchell is about 600 kilometres north-north-west of Exmouth and is expected to move south over the next 48 hours.
It is likely to intensify to a category-two overnight, before weakening again on Sunday.
However, David Farr from the Bureau of Meteorology says Mitchell is not expected to cross the coast.
"On the current forecast track it won't affect the north west coast of WA," he said.
"There's a slight risk of gales on the upper west coast if the system takes a track a bit more to the south-east from what we're expecting. But it is only a slight risk."
© ABC 2012
18:12 EDT Queensland's Community Recovery and Resilience Minister says the space where a large sinkhole formed after Bundaberg's worst floods has been converted into parklands.