The Australian weather bureau expects ex-tropical cyclone Grant to become a a category one cyclone again on Thursday as it moves across the Gulf of Carpentaria.
As a result, the bureau has issued a cyclone watch for the Northern Territory's northeast coast.
The region was hit by torrential rain overnight on Monday from the storm, leaving roads cut and people stranded.
The ABC reports there's widespread flooding north of Katherine caused by ex-tropical cyclone Grant.
Forecaster Graeme King says it dumped up to 385mm of rain.
Rivers rose quickly and many areas are now cut off by flood waters.
In one incident a freight train was swept off a bridge near Katherine, trapping its driver and co-driver.
They were both rescued, but one of them had to be airlifted to hospital with back injuries.