Thousands of people have been forced to leave their homes in northeast coast, as a cyclone threatens tourism towns and rural communities.
Officials say Cyclone Yasi could even hit areas deep inland that were ruined by floods last month.
Mines, rail lines and coal ports are closed in Queensland as the cyclone headed towards the coastline.
Up to a third of Australia's sugar crop is also under threat, officials said.
'This storm is huge and life-threatening,' Queensland Premier Anna Bligh said, warning the system was still intensifying and picking up speed on its path from the Coral Sea, with destructive winds expected on tomorrow morning.
Cyclone Yasi is expected to generate winds of up to 280km/h when it hits the northern coast of Queensland early on Thursday, matching the strength of Hurricane Katrina, which devastated New Orleans in 2005.
With a strong monsoon feeding Yasi's 650km-wide front, the storm is also expected to maintain its intensity long after smashing into the coast and could sweep inland as far as the outback mining city of Mt Isa, some 900km inland.
More than 400,000 people live in the cyclone's expected path, including the cities of Cairns, Townsville and Mackay, which are also key tourist areas and take in Australia's Great Barrier Reef.
