Cyclone Nathan to intensify off Northern Territory coast

Tropical cyclone Nathan is set to intensify off the coast of the Northern Territory before weakening on its way back inland.

The cyclone has been lashing the Northern Territory with wind gusts reaching up to 140km/h in some areas.

It was moving northwest over Arnhem Bay, west of Nhulunbuy, at 13km/h today with the destructive core approaching Elcho Island, which was severely damaged by Cyclone Lam in late February.

Destructive winds are set to develop this evening for Elcho Island, while a storm tide, with damaging waves and dangerous flooding, is also expected between Elcho Island and Cape Shield.

The cyclone will strengthen into a category 3 offshore tomorrow morning, according to the Bureau of Meteorology.

"That's because it's expected to stay a bit further offshore, so it should be able to reach that strength," a BoM spokesperson said.

"(It will) stay that way into the latter part of Monday and then hopefully it will be progressively attacked by winds around it so it should weaken off."

It's expected to weaken to a category 1 or 2 system before making landfall again around Tuesday.

"So we have a weakening trend as it approaches the coast again, but in the near future it's expected to intensify," the spokesperson said.

The cyclone intensified to a "high end" category 2 today, crossing the coast between Nhulunbuy and Cape Shield in the morning.

Nhulunbuy cafe owner Paul King, who had taken shelter at his business with his family, said the power went out and a few trees had been blown over.

"One tree has gone on someone's home, just a friend of ours - we've seen it on Facebook," he said.

"They're actually not at home, they're actually on holidays so they're lucky."

Residents from Cape Shield to Alyangula are being told it is now safe to leave shelter areas, but to wear strong clothing and footwear, and be aware of fallen power lines and debris.