Tropical cyclone Trevor has weakened to category two strength and drifted southwest during the early hours of Wednesday, the Bureau of Meteorology reported.
An earlier cyclone warning for Orford Ness and Cape Grenville has also been cancelled, but the warning remains for other areas in the cyclone's path.
The community of Lockhart River was still on lockdown, with wind gusts of 133 kilometres per hour recorded in the remote community at about 6:00pm Tuesday as Severe Tropical Cyclone Trevor crossed the coast.
Cyclone Trevor made landfall as a category three system about 40 kilometres south-east of Lockhart River on the Cape York Peninsula coast.
It weakened to a category two system, drifting southwest at a rate of eight kilometres per hour.
BOM said the system would continue toweaken as it passed the Peninsula but would remain a category one cyclone until it entered the Gulf of Carpentaria later on Wednesday.
It is expected to re-intensify rapidly once it enters the Gulf and tracks towards the Northern Territory.
High tides are also expected along the Queensland coast, north of Port Douglas.
Heavy rainfall, which may lead to flash flooding, is forecast across far north Queensland for the next few days.
A Flood Warning is current for the Daintree and Mossman rivers as well as a broader Flood Watch for catchments north of Innisfail to Kowanyama.
The main road into Cape York — the Peninsula Development Road — was closed and the Lockhart State School was closed for the day.
Lockhart River council chief executive Dave Clarke said the speed and force with which the cyclone came in from the Coral Sea came as a surprise.
"[It was] certainly a lot more severe than we were anticipating and I'm glad our preparation was reasonably sound and well-practised," Mr Clarke said.
"There's an awful lot of trees down, there's some structural damage."
He said the affected area was sparsely populated and most people were able to shelter with family and friends in town as the cyclone moved through.
BOM Queensland manager Bruce Gunn said he did not expect the dangerous core to majorly affect properties.
"At this stage, we're not expecting any populated settlements to be particularly inundated but there will be coastal erosion and inundation further south," Mr Gunn said.
Forecasters expected significant falls through the Cape, Cooktown and down to Cairns and urged locals to look out for flood warnings.
Portland Roads resident Jason, who lives about 40 kilometres north of Lockhart River, told ABC Radio he was ready to see Cyclone Trevor sweep through.
"I'm feeling the breeze, that's for sure. I got a bottle of Stones Ginger Wine here and two dogs, so I'll be sweet," he said.
"I've got to tell you the bureau was pretty much spot on with the way they tracked it because it's sort of been blowing its arse off since about 8:00 [Tuesday] morning but then about 3:00pm it just kicked in and yeah, I reckon it's gusting every part of 125 [kilometres per hour].
"This is a pretty old community so you know, all these buildings here have seen a few cyclones in their time."
Around lunch time on Tuesday, Lockhart River Mayor Wayne Butcher said the town was battening down for strong winds.
"We've just had the police go round and have a siren go in the community just to let everyone know we want everybody indoors. We're shutting down the whole community until the cyclone passes later on tonight," Mr Butcher said.
"It's actually the same path Cyclone Monica crossed in around about 2006. We've had a few practices in the last few years so the people are more prepared.
"The only concerns we had were more with the elderly. I think we've just got to batten down and prepare to weather the storm."
Owner of Coen's Exchange Hotel, Barry Mulley, said while the cyclone was tracking to impact areas further north of the town, locals remained on high alert.
Earlier in the day, Mr Mulley had been concerned Coen was "getting smashed", saying the wind was "really starting to howl now".
"We've cleaned up all the yards, the sheds and tied all our boats down and trailers," Mr Mulley said.
"We've got a couple of palettes of water, made sure our meat was fully stocked, but we'd have enough meat in the pub now to run the town for two months.
"The town is fairly well prepared. We do have good cops here, we've got a couple of old-school nurses and we do have a doctor in town and of course our reliable flying doctor on standby as well."
'It's the last thing we need'
Further south, Douglas Shire is expecting falls in excess of 200 millimetres a day for the next three days.
The area has been drenched already this summer, with previous storms costing an estimated $15 million in damage.
Mayor Julia Leu said the prospect of more torrential rain was concerning.
"Frankly, it's the last thing we need. We're still underway with a massive recovery job as a result of the record flooding that we had over the Australia Day weekend so we really don't want any more rain — but we are prepared," she said.
Far North district officer chief Superintendent Brian Huxley said extra SES crews and police had been deployed to Cape York in preparation for the cyclone.
"Each season there are people who make really poor decisions by walking through or driving through flooded roads and creeks and get themselves into strife.
"Nobody can tell what is going to happen with flash flooding. We all know what's floating around in the water up there, snakes, crocodiles and everything else, so people just need to be really careful."ABC