Tropical cyclone Larry posed a "very serious threat to life and property" in the far north of Queensland state on Monday, the Australian Bureau of Meteorology said, adding it had forced thousands of people to take shelter or evacuate.
There were no immediate reports of casualties.
The winds were the strongest since a cyclone hit the northern city of Darwin in 1974, destroying about 70% of the city and killing 71 people.
John Howard, the Prime Minister, ordered military helicopters on alert for rescue operations, but officials said the cyclone was downgraded to a category 4 from a category 5 storm as it came ashore near the town of Innisfail.
"It still poses a real threat to people and property," Bruce Gunn from Australia's Cyclone Warning Centre told Sky television, adding that flying debris was the greatest danger to people.
Howard ordered military
helicopters on alert
More than 5000 homes in the area were without electricity.
"A large number of houses have been unroofed," Queensland police superintendent Mike Keating told the Seven television network. He said there were reports of people suffering minor injuries, although the number was small, at this stage.
Steven Russo from the township of Wangan told the Seven network he hid under his bed with his two children and said the scene outside was "absolute devastation - you can't describe it".
Cairns is the main tourist centre of north Queensland and is a base for visitors to the Great Barrier Reef and inland tropical rainforests. The area is also home to about 25% of Australia's sugar crop and most of Australia's banana industry.
George Pervan, the Local Council deputy mayor, told Australian Associated press the cyclone had torn through the sugar cane and banana crops, causing widespread damage.
"The crops are all gone, bananas are all flattened, cane's flattened. It'll kill us for 12 or 18 months," Pervan said.
Oil and gas fields
There were no reports of any damage to Australia's offshore oil and gas fields, which are located off the west coast, officials said. But mining operations further inland were bracing for high winds as the storm moved west.
"...absolute devastation - you can't describe it"
Local Council deputy mayor, Cairns
Kim Robinson, the managing director of Kagara Zinc Ltd. said the firm's ore treatment plant had been evacuated, but he did not expect any lasting damage to the facility, which is located well inland from Cairns.
In Melbourne, Howard said the military was ready to help out, once the cyclone had passed.
"This is certainly a very fearful and challenging time for the people of far north Queensland and I want them to know that their fellow Australians are with them," he said.