The Fiji Metservice says Cyclone Freda has reached its maximum intensity.
Freda is moving south about 600 kilometres west of Vanuatu and is expected to turn southeastwards after the next 24 hours.
A senior forecaster Terry Atalifo says Cyclone Freda is now weakening and will pass very close to New Caledonia.
"If this system does not weaken before it reaches them then they might experience some hurricane force winds. But if it does then most probably they'll experience either gale or stronger winds over New Caledonia and a lot of rain as well."
Terry Atalifo says Freda is currently a category four cyclone.
Vanuatu's Meteorology and Geo-Hazards Department in Port Vila has issued warnings, saying that although Freda is not forecast to sweep directly over the country, it has little confidence in the storm's predicted track.
They say the central and southern islands of Vanuatu may get strong gale force winds of up to 90-kilometres an hour over the next two days, and heavy rainfall is also expected.
New Caledonia's Meteo France weather service has also put warnings in place as the cyclone moves towards Belep Island in the north.