A powerful cyclone bearing down on northeast Australia has been upgraded to a maximum-strength category five storm, the most destructive seen for generations with the prospect of serious damage and risk to life, disaster officials said on Wednesday.

Thousands of people have been evacuated in the state of Queensland with mines, rail lines and coal ports all shut down as winds are expected to be in excess of 280 km (175 miles) per hour, potentially hitting inland areas still struggling to recover after several months of flooding.

'Severe tropical cyclone Yasi is a large and very powerful tropical cyclone that poses an extremely serious threat to life and property. This impact is likely to be more life threatening than any experienced during recent generations,' an updated cyclone warning from Queensland disaster officials said.

Cyclone Yasi is about 650 km off the coast of northeastern Australia and is expected to make landfall at 10 pm local (1200 GMT) on the Queensland coast between Cairns and Innisfail.

More than 400,000 people live in the cyclone's expected path, which includes the cities of Cairns, Townsville and Mackay, which are also tourist hubs and take in Australia's Great Barrier Reef. 

The main streets of Cairns were largely deserted early on Wednesday, with shops closed and windows taped to stop shards of flying glass.

On Tuesday, the military began evacuating nearly 40,000 people from low-lying coastal areas, with the high winds expected to create a storm surge of 5 metres, which could carry the water far inland.

Queensland, which accounts for about a fifth of Australia's  economy and 90 percent of steelmaking coal exports worth about $20 billion a year, has had a cruel summer, with floods sweeping the eastern seaboard over the past month, killing 35 people.   - Reuters