The Fiji Meteorological Service says Cyclone Vania is likely to pass just east of the main island of New Caledonia overnight, but the mainland will still experience gale force winds.
The Meteorological Service says the Category 2 cyclone will have average winds around the centre of 50 knots gusting to 70 knots.
The cyclone is expected to remain a Category 2 cyclone in the next 24 hours.
Tropical cyclone forecaster Amit Singh says the cyclone is located between the islands of Lifou and Mare in the Loyalty Islands of New Caledonia, moving south at about 4 knots.
The main island of New Caledonia is now on orange alert as Cyclone Vania crosses the Loyalty Islands.
Walter Zweifel reports.
"First reports from the Loyalty islands say the cyclone caused damage to the vegetation. However, a red alert is still in force meaning that people have to stay inside. Warnings have been issued to stay clear of power lines that in places have been blown down. The system is slow moving and although its winds have weakened they are expected to intensify again. The southern half of the main island has been on orange alert since 5 am this morning, prompting the gradual closure of schools and businesses. Some bus services and four international flights have been cancelled. The authorities have also decided to evacuate people from the capital's squatter settlements."
A resident on the outskirts of Noumea says people on the mainland are taking the threat of Vania seriously as memories are still fresh of Cyclone Erika which killed two people and caused widespread damage in 2003.
Tuo Chinula says many are staying at home preparing in case the orange alert is raised higher.
Erika was a big lesson for a lot of people. In the last couple of days everybody's been stocking up on basic supplies such as water, candles in case the electricity goes and batteries as well to listen to their radios because we have to listen to the radios as they're making announcements.
Tuo Chinula says there've been some power cuts, heavy rain and wind so far.