The Fiji Meteorological Service says Cyclone Vania has now been upgraded to hurricane force as it heads towards the main island of New Caledonia.
The Category 3 cyclone has now passed over the Loyalty Islands and is expected to move over the main island at about 5pm this evening local time.
The services tropical cyclone forecaster, Misaeli Funaki says the system has weakened as it made landfall in the last few hours but once it clears that it is expected to intensify as it moves further south.
"We've upgraded Tropical Cyclone Vania into a Category 3 which means its now into the hurricane force category. With that we are expecting winds of greater than or approximately 65 knots, approximately within 30 nautical miles of the centre, storm force winds within 50 nautical miles, and gale force winds are only limited to certain sectors."
Misaeli Funaki says they have issued wind warnings for those areas.
Reports from the island of Lifou in the Loyalty Islands say the cyclone appears to have caused only minor damage to vegetation.
A worker at a holiday resort in the main village says the winds have subsided and the sea is calmer than last night.
A red alert remains in force for the Loyalty Islands, which means everybody has to remain inside and all movements are prohibited.
The French High Commission has also declared an orange cyclone alert for the southern half of New Caledonia's main island which came into effect earlier this morning.
This means schools and shops will have to remain closed.
The High Commission says people living in squatter settlements will be progressively evacuated.
Vanuatu's National Disaster Management Office has not been able to make contact overnight with the areas thought to be worst hit by Tropical Cyclone Vania.
Communication channels have been down because of the storm which pummelled Tafea province with winds of up to 140 kilometres per hour.
The National Disaster Management Office says the alert has now been lifted for Vanuatu.