Tropical Cyclone Oma has strengthened to category 3 and is expected to come close to the south-east Queensland coast and potentially make landfall.
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Meteorologist Adam Blazak said a cyclone watch could be issued on Wednesday afternoon, on top of the hazardous surf warnings already in place.
On Tuesday, some of the weather bureau's modelling predicted the tropical cyclone to track west towards Queensland, while other models showed it was likely to head south for New Zealand.
The system is likely to whip up dangerous swells, significantly erode beaches, dump isolated falls of 300 millimetres and bring wind gusts faster than 100km/h.
Differences between models make it difficult to tell how bad the impact will be and where. One run on Tuesday of the European model had as much as 1500 millimetres being dumped over western Brisbane.
While that scenario is now less likely, meteorologists are looking at a landfall between Brisbane and Bundaberg, with the Sunshine Coast one area that could be hard hit. Aside from heavy rain, the expected storm surge will be combining with the highest tides of the year.
"[Oma] appears most likely to approach the south-east Queensland coast and a crossing is possible at the weekend or next week," Mr Blazak said.
"We still have hazardous beach conditions and ... heavy rainfall totals from Saturday onwards could be in excess of 300 millimetres.
"These falls will be fairly isolated and depend on how close the system gets and its position.
"There is still uncertainty from the weekend onwards because then our modelling starts telling us different things."
A category 3 system can result in roof and structural damage, mass power failures and destructive winds with gusts in excess of 165-224km/h.
The Bureau of Meteorology's forecast path map, updated on Wednesday morning, showed Cyclone Oma would weaken to a category 2 system on Friday morning on its final approach to the coast.
While it is unusual for a tropical cyclone to be projected so far south, one previous instance was cyclone Fran, which crossed the coast near the town of Seventeen Seventy in March 1992.
At 5am on Wednesday, the cyclone was about 1120 kilometres north-east of Brisbane in the Coral Sea and was predicted to move south-west in the coming days.
It was expected to generate an increasing east-to-northeasterly swell along southern Queensland beaches.
"Water levels on the high tide may exceed the highest tide of the year by around half a metre on the morning high tide on Wednesday morning," the BoM warning said.
"Water levels on the high tide may exceed the highest tide of the year by around one metre on the morning high tides on Thursday and Friday mornings.
"Locations which may be affected include Gold Coast, Maroochydore, Moreton Island, Noosa Heads, Caloundra and Rainbow Beach.
"Surf and swell conditions are expected to be hazardous for coastal activities such as rock fishing, boating, and swimming in the following areas."
Hazardous surf warnings remained in place for the Capricornia Coast, Hervey Bay, Fraser Island Coast, Sunshine Coast Waters, Moreton Bay and Gold Coast waters.
On Tuesday, a driver was caught out taking on the big swell at Rainbow Beach, north of the Sunshine Coast, and was forced to abandon a ute, leaving it at the mercy of the pounding waves.
A woman swimming in a natural pool in Noosa National Park was dumped on rocks by a freak wave on Monday and had to be winched to safety by a rescue helicopter.
The swimmer, aged in her 20s, was flown to Sunshine Coast University Hospital in a stable condition.
Gold Coast council took precautions on Tuesday ahead of Cyclone Oma's arrival by pulling down coastal fencing and a beach shower.
- with Peter Hannam
