Authorities monitoring Cyclone Rusty's path through Western Australia's Pilbara region have issued an all clear for Port and South Hedland.
The weather bureau said winds were expected to gradually ease in Port Hedland overnight, but warned widespread heavy rainfall was likely to cause major flooding in the De Grey catchment.
Dangerous storm tides were also possible for coastal communities between De Grey and Wallal.
The category three system made landfall on Wednesday afternoon at Pardoo Station, about 120 kilometres north-east of Port Hedland.
It was tracking inland towards Marble Bar and was expected to hit the town as a category two storm on Thursday morning.
Communities between Pardoo and Nullagine are on red alert and people there need to remain indoors, while towns between Nullagine and Newman have been told to prepare for cyclonic weather.
The system is still expected to pack winds of more than 165kph at its core and is tipped to dump up to 600 millimetres on the Pilbara.
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Port and South Hedland had been on red alert since Tuesday morning and were expected to bear the brunt of the storm.
South Hedland police Senior Sergeant Ron Patchett said the towns appeared to have sustained only minor damage.
"We were expecting the worst, we were expecting to get smashed," he said.
"As much damage as going to be possible that a cyclone could do was going to be experienced here, and as a result we're all feeling a bit lucky."
Les Hayter from the Department of Fire and Emergency Services says the storm is expected to continue to weaken.
"We're looking at a category two sometime tomorrow, early hours of the morning on Thursday, near or at Marble Bar," he said.
"Category one near Newman late tomorrow evening but that could quite easily drop to a low."
The cyclone crossed the coast near Pardoo, where there is a cattle station and a roadhouse.
Ian Badger at Pardoo Roadhouse said the winds were strong and the rain steady.
He said he was well prepared but the amount of rain hitting the region in the past few days had been a concern.
"It's just a matter of hanging on. The amount of water that's around is a bit worrying," he said.
"The ground is very sodden, very soft. As soon as you get a get a bit of strong wind, trees start going over."
Weather bureau spokesman Mike Bergin said a storm surge was still expected.
"We still expect there will be a very significant storm surge associated with Rusty, but that will be along the coast in the De Grey-Pardoo area," he said.
"Already we've seen significant rainfall. Rainfall totals this morning were up around 180 millimetres in places and we do expect to see heavy rainfall of course as the system moves south."
A cyclone warning remained for coastal areas from Sandfire Roadhouse to Whim Creek, including Port Hedland and inland areas of the eastern Pilbara, including Marble Bar, Nullagine, Newman and Telfer.
Police said there had been no reports of damage in Hedland apart from a few trees that had fallen across roads.
Mr Bergin said areas in the path of the cyclone had been hit hard.
"Of interest Port Hedland has now experienced gale force winds for over 36 hours, which is a record for a protracted period of gales which has not been experienced at Port Hedland since we've been taking records there," he said.
DFES deputy commissioner Lloyd Bailey said conditions could still be hazardous even in areas where alerts have been lifted.
"There could be fallen powerlines, could be effluent in the street from the sewerage system and we do need people to remain vigilant and cautious even when it is lifted."
He said the main concern would be the possibility of flooding.
Schools were closed and mines shut down, with some evacuated, before Rusty hit.
© ABC 2013
14:26 EST As the storm and flood cleanup continues, the NSW Government says the damage bill to agriculture could run to hundreds of millions of dollars.