Cyclone weakens but danger remains as storm lashes Cape

A powerful cyclone has weakened but remains a threat after unleashing destructive winds and torrential rain in northern Australia.

Tropical Cyclone Narelle crossed the coast at Queensland's Cape York Peninsula as a dangerous category four system about 7am on Friday, producing wind gusts of more than 250km/h.

Residents bunkered down as the monster storm hit the far north coast, causing widespread power outages and flooding.

It has since been downgraded to a category three as it moves west toward the Gulf of Carpentaria but is still producing gusts up to 200km/h.

Narelle was billed as the biggest cyclone "in living memory" as it approached the coast, threatening to become the first category five system to impact Cape York in more than 100 years.

It was downgraded early on Friday before it made landfall near the remote community of Coen, north of Cairns.

The town has a population of about 320 but 250 people chose to stay and face Narelle's wrath.

Rain began about 7pm Thursday, with winds picking up just before dawn and intensifying through the morning, local business owner Sarah Watkins said.

"You can hear it howling and beating against panels," Ms Watkins told AAP as the storm raged.

Coen has no cyclone shelter, and locals have sought refuge in the few solid brick buildings, with the local pub a popular choice.

"We're safe. We're surrounded by the pub buildings and the warehouse," Ms Watkins said.

"Honestly, for the moment, it's not as bad as I was expecting, but doesn't mean it can't get worse."

Further north at Lockhart River, local mayor Wayne Butcher said the winds were "howling".

"The winds are coming from the west and it is gale force. The trees are whistling and swaying side to side," he told AAP.

"Everyone is in and locked down and now we just have to weather the storm."

Residents in Narelle's sights have been urged to stay inside and wait for the storm to pass amid reports from Coen locals of lost roofs and fallen trees.

"Wind is intensifying, in many cases, will be the strongest wind that people have experienced in this part of the state for a long, long time," Queensland Premier David Crisafulli said.

The torrential rain triggered by Narelle will pose its own challenges, with downpours expected to hit the region for up to 48 hours.

More than 200mm has been predicted from Ingham north to Lockhart River and across Cape York.

And more than 500mm has been forecast around Cooktown, north of Cairns, sparking fears of flash flooding.

The state government was working with the commonwealth on Cyclone Narelle recovery payments, Mr Crisafulli said.

"But equally importantly is the need for the councils to know that we'll have their back to go in and start cleaning those communities up," he told ABC News.

The system is set to enter the Gulf of Carpentaria as a category two before intensifying again as it heads toward the Northern Territory late on Saturday, triggering hundreds of evacuations.

About 500 people will be airlifted from NT's remote Gulf community of Numbulwar to Darwin.

The NT capital had already received evacuees from Daly River and Palumpa communities.

"This is the seventh high-risk weather event the Northern Territory has endured over the past five months," NT Fire and Emergency Services Commissioner Andrew Warton told reporters on Friday.