Some people are thronging to evacuation centres while many others lined up to catch flights out of the city until the airport was shut down to avoid damage during the cyclone.
The cyclone can cause severe loss to life and property as engineers have warned that with the winds blowing at about 300 km per hour, Yasi can even blow apart away "cyclone proof" homes.
Queensland state premier Anna Bligh said, "We are facing a storm of catastrophic proportions," and added, "all aspects of this cyclone are going to be terrifying and potentially very, very damaging."
The cyclone's expected path which includes the cities of Townsville, Cairns and Mackay is home to nearly 400, 000 people and covers some of Australia's most popular tourist destinations.
Mines, rail lines and coal ports have all been shut down. The cyclone is expected to make landfall at 1200 GMT on the Queensland coast between Cairns and Innisfail.
Queensland, is a major centre of Australia's economy and accounts for nearly 90 per cent of steel-making coal exports worth about $20.2 billion a year.