Tropical Cyclone Fina weakened to a category one system overnight but is expected to restrengthen as it moves toward the Northern Territory.
Darwin has been placed in a "warning zone" amid fears the system could intensify into a destructive category three system later on Friday.
Locals have stocked up on supplies as they brace for winds that could damage houses and vehicles, fell trees and cut power while "throwing around the outdoor furniture".
Early on Friday, Cyclone Fina was sustaining winds near the centre of 75km/h, with gusts up to 100km/h, and was about 335km northeast of Darwin, moving slowly.
The system could intensify into a category two while tracking southwest on Friday and approaching the Cobourg Peninsula and Tiwi Islands.
It is set to continue southwest through the Van Diemen Gulf on Saturday, heading just to the north of Darwin.
There was a chance it could reach category three intensity late on Friday or early Saturday as it moved into the Gulf, the Bureau of Meteorology said.
A warning zone was in place early on Friday for Darwin, the Tiwi Islands and Cape Hotham to Warruwi, including the Cobourg Peninsula, Minjilang and Gunbalanya.
Damaging wind gusts of up to 120km/h over the Cobourg Peninsula may hit on Friday morning, with gales expected to extend further west to include the Tiwi Islands late on Friday, and Darwin during Saturday.
Destructive wind gusts up to 155km/h may develop between Cape Don and Warruwi on Friday as the system nears the coast, extending to the Tiwi Islands early on Saturday and possibly to Darwin later in the day.
The bureau warned that heavy rain could cause flash flooding in coastal areas between the Tiwis and Warruwi from Friday, extending to the coast and nearby inland areas, including Darwin, on Saturday.
Coastal residents on the Tiwis and between Cape Hotham and Warruwi are warned of a dangerous storm tide.
Top End residents have been stocking up on basics with bottled water, bread, canned goods and other household supplies flying off supermarket shelves.
Multiple weekend sports and entertainment events have also been cancelled.
Senior Meteorologist Angus Hines said Darwin residents could expect potentially damaging winds on Saturday from lunchtime.
"Those very strong winds could bring down trees, cause damage to vehicles and houses and it could lead to power outages, throwing around the outdoor furniture, fences and roof panels."
Rain will also intensify across Darwin on Saturday, leading to potential flash flooding.
By late Sunday, conditions in the Top End will start to ease as Fina moves into Western Australia.
The cyclone should not longer impact NT by Wednesday, Mr Hines said.
Darwin residents have been urged to ensure they have an emergency plan and to shelter at home, with most buildings made to withstand cyclones.
Cyclone Tracy was the most devastating system to hit Darwin, killing 66 people after it was destroyed on Christmas Day in 1974.
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