Narelle is already impacting coastal areas of the eastern Top End with a coastal crossing early on Sunday morning near Cape Shield to the northwest of Groote Eylandt.
It is expected to track across the Top End throughout Sunday and Monday as a tropical low, with residents told to expect heavy, locally intense rainfall and damaging winds.
The storm was upgraded to category three late on Saturday and has brought with it damaging winds 130 km/h winds near the centre, and 185 km/h gusts, as well as severe rainfall across much of the Top End.
Towns on the Gulf of Carpentaria and further inland in the Northern Territory have been told by the Bureau of Meteorology to expect wind gusts up to 165 kilometres an hour and rainfall above 200 millimetres on Sunday.
The community was well-prepared for the storm and the government response so far had been effective, the director of the Savannah Way Motel in the Gulf town of Borroloola said.
"There has been a fair bit of water around from previous rain," Anastasi Kambourakis told AAP.
"Most of the people who live in Borroloola are used to it this time of year."
Narelle is the first cyclone to hit the area in more than a year and lessons have been learned from previous experiences.
"We did lose freight for a little bit," Mr Kambourakis said.
"The government always prioritises getting it through to the community."
Gulf communities are also warned to expect abnormally high sea levels that could cause sea water flooding of low-lying areas.
Residents sheltering at home should move to the smallest, strongest, most protective room in their house, such as a bathroom or a toilet.
Flood warnings are in place across much of the Top End, particularly in Katherine and Daly.
Patients were evacuated from Katherine Hospital in anticipation of Narelle worsening the delicate flood situation in the town.
The storm is expected to move slowly south and west on Sunday, with warnings in place for large swathes of Western Australia as well.
Residents across the Kimberley have been told to prepare now for the likelihood of heavy rain on Monday as the storm slowly weakens.
In Queensland, the clean-up from the cyclone has begun with energy crews deployed to return to power more than a 1000 homes.
Police have delivered fuel to remote communities on Cape York to help locals recover from the storm, which brought down trees and ripped off roofs as it passed.
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