Plans to move thousands of residents from Hervey Bay to Brisbane have been put on hold as Tropical Cyclone Hamish continues to weaken off the central Queensland coast.
The weather bureau says the category 4 storm is 215 kilometres north-east of Yeppoon and slowly moving south-east.
The bureau expects to downgrade Hamish to a category 3 cyclone today and it should become a category 2 storm by tomorrow.
Weather bureau spokesman Jim Davidson says the immediate threat is over, but people should remain on alert until Wednesday.
"We're not out of the woods yet," he said.
"There's still some likelihood - even though it's small - of the cyclone returning to the coast.
"So I think the best idea at the moment is to just remain a watching brief, but please don't let our guard down."
Forecaster Tony Auden says there is a less than 10 per cent chance of the cyclone making landfall.
"It is most likely going to sit a couple of hundred kilometres off Sandy Cape on Fraser Island for a couple of days and continue to weaken," he said.
"So we do still have warnings for damaging winds and large seas and high tides between Yeppoon and Hervey Bay and a watch also for Tuesday for Hervey Bay to Tewantin."
Queensland Premier Anna Bligh says she is pleased the immediate threat has eased.
"The news overnight is very welcome but I don't think any of us should see ourselves as out of danger yet," she said.
"These are very unpredictable events and while the modelling is very positive, it is just that - modelling and we know that we need to continue to be on alert."
Fraser Coast Mayor Mick Kruger says the storm surge threat has also eased.
"The storm surge that we were expecting of around three metres has now decreased and we're only expecting between 0.5 and 1-metre sometime on Tuesday," he said.
Ron Smith from the disaster management team on the Fraser Coast says the region has been spared widespread damage.
"The cyclone is moving offshore, it's moving to the east and it's weakening, so the risk of having a storm surge is much much less - not even heavy rains," he said.
"We're only being modelled on about 50 millimetres in the next 24 hours."
However, Emergency Management Queensland (EMQ) spokesman Frank Pagano says tourists are not allowed back to Lady Elliott and Heron Islands yet and Fraser Island remains closed to campers.
"Be too soon for them to go back to the islands," he said.
"The cyclone is still around 200 kilometres north-east of Yeppoon, so even though the track suggests that it won't impact on those islands, it's too early to call that."
More than 500 homes were sandbagged in Yeppoon overnight and the local hospital was evacuated, with patients taken to Rockhampton as a precaution.
But Yeppoon State Emergency Service (SES) controller Bob Jeacocke says they are scaling back operations as weather conditions ease in the region.
"We'll only be bringing in a very skeleton staff at the moment and we'll probably be standing people down at lunchtime if the conditions don't deteriorate," he said.
Meanwhile, Gladstone's port remains closed as the city waits for Hamish to pass.
The Gladstone port was closed over the weekend and some homes in low lying areas were sand bagged yesterday.
Gladstone Regional Council chief executive Graeme Kanofski says emergency teams are monitoring the cyclone.
"A lot of preparatory work done yesterday, assistance to some residents the SES provided but generally now we're back to a wait-and-see monitor role," he said.