Tropical Cyclone Lola has strengthened and been upgraded to a category 5 with damaging winds over 200km/h expected.
MetService said the tropical cyclone is continuing its south-westward movement and is expected over northern Vanuatu later on Tuesday and into Wednesday, before becoming less intense later this week.
NIWA said the winds are expected to be over 200km/h and forecast to increase to more than 220km/h.
WeatherWatch said the upgrade to Category 5 is the "worst-case set-up", and the slow speed of the system will increase the risk of damage.
The cyclone is expected to hit Vanuatu's second-largest city, Luganville, at midday on Tuesday.
The Vanuatu Meteorology and Geo-hazards Department is warning of flash flooding and damaging gale-force winds on Tuesday and Wednesday for the provinces of Torba, Penama and Sanma.
This has seen evacuation centres set up in Luganville. Authorities are telling locals to stock up on food and water and prepare to evacuate their homes in case of flooding.
The council's evacuation team spokesperson, Colenette Tapi, said ward secretaries were "passing on information" and "making sure people are prepared".
"We are trying to get people prepared like stocking food and cutting down trees," Tapi said, RNZ reported.
A category 5 cyclone is the highest on the scale, with MetService describing it as a "really severe event".
MetService meteorologist John Law told Newshub the impacts on Vanuatu will be "severe".
"So [there will be] strong winds, heavy rainfall and large swells as well. So those areas are of most concern as we go through the rest of today," he said.
"Wind speeds in excess of 200km/h, so it's definitely a situation people are very aware of."
Law said the cyclone will move across Vanuatu on Tuesday before "weakening fairly substantially" and heading towards New Caledonia.
Impact on New Zealand
Law told Newshub the impact on New Zealand is still too early to say but depends on the path the cyclone takes, with any impacts not likely to be felt until the weekend or early next week.
"At the moment, there is still a lot of time before it might make its presence felt towards us in New Zealand... It all depends on how far south it comes, we've got lots of things to watch out for," Law said.
"But at the moment, I'd say it's a situation we're going to keep a close eye on, particularly across those northern parts of New Zealand. We're unlikely to find the cyclone itself, but the remnants, the extra moisture, will come down towards us and that may well have some impacts across those northern parts of New Zealand.
"But like I say, at the moment, we've got a fair while to go to get that real clarity of where it's going to be impacted and what those impacts will be for New Zealand."
Laws said the cyclone has come early in the season, which isn't meant to start until November.
"It's very early for such an intense severe cyclone to form, so it's definitely an unusual situation and likely to cause sadly some devastating effects across Vanuatu," Law told Newshub.
WeatherWatch said on Monday the tropical cyclone isn't expected to impact New Zealand at this stage as modelling showed it "falling apart" as it heads out of the tropics.
"El Niño tends to put more high pressure between NZ and Australia… a bit like an invisible brick wall in the sky to make it harder for tropical cyclones to reach NZ," WeatherWatch said.
"It is possible the leftovers of this tropical low may track into or near NZ... it will very likely fall apart or weaken significantly.
"At this stage, all modelling shows the storm falling apart as it heads out of the tropics and becoming a fairly weak sub-tropical low."
