The Bureau of Meteorology says Cyclone Larry, a category five storm which was later on Monday downgraded, hit the Queensland coast around Innisfail, north of Townsville, between 7am and 9am AEST (2200 GMT), bringing winds of up to 290 kph.
More than 500 residents were evacuated from Townsville's northern suburbs overnight.
Mandatory evacuations had been enforced in numerous low-lying seafront areas, including in the Johnstone and Cardwell shires, that bore the brunt of the cyclone and its four-metre storm surge.
Emergency workers have reported devastating wind gusts, surging seas and torrential rain.
The most destructive part of the huge storm made landfall near the town of Innisfail, south of Cairns, unroofing homes with wind gusts reaching 290kph.
Innisfail police have been inundated with calls from residents whose homes are "literally crumbling around them".
"We have roofs flying off in Fly Fish Point, Silkwood and in the city centre, and we have trees across roads." an Innisfail police spokeswoman said.
Innisfail Hospital director of nursing Leslie Harris said wards had been cleared yesterday to make way for possible cyclone victims.
Queensland counter-disaster and rescue services North Queensland spokeswoman Kath Ryan said the region was "pummelled".
Authorities have reported houses being destroyed and banana and sugar cane crops wiped out.
Innisfail has been left without power and four people from Innisfail are believed to have sustained minor injuries as a result of the cyclone, police say.
Cairns Police Chief Superintendent Mike Keating said Cairns had escaped relatively unscathed.
But he said the region south of Cairns, including Innisfail, appeared to have copped the brunt of the cyclone.
"The advice I've got is about four people have been injured in Innisfail, and they are minor injuries," Supt Keating said.
"We will get an assessment of the situation but I understand in Innisfail and that general area there is quite a lot of damage to houses, a large number of houses have been unroofed."
Assistance needed
Military aircraft will fly up the far north Queensland coast to assess the trail of destruction left by Cyclone Larry.
Queensland Emergency Services Minister Pat Purcell said F-111s would carry out the aerial check to determine if Black Hawk helicopters, currently on standby, should be flown in.
Prime Minister John Howard pledged federal assistance for the region.
Authorities say Innisfail farmers will be plunged into financial ruin in the wake of the storm.
Johnstone Shire Council deputy mayor George Pervan said the cyclone had torn through the sugar cane and banana crops, causing extensive damage.
"The crops are all gone, bananas are all flattened, cane's flattened. It'll kill us for 12 or 18 months," Mr Pervan said.
"There's been plenty of damage. There's roofs gone off, at our place ... we're just off the river and there's damage everywhere. It's unbelievable.
Canegrowers chairman Alf Cristaudo said the area that took the brunt of the cyclone - Innisfail, Tully and Cairns - produces around 25 percent of the nation's sugar crop.
"It's a little too early to tell yet, but I expect particularly in the Cairns, Innisfail, Tully area that there is going to be some structural damage to property and I believe there will also be some damage to cane.
Federal north Queensland MP Bob Katter said the cyclone had devastated the banana industry.
He said 90 percent of the Australian industry was in the cyclone area and the disaster could affect up to 4,000 jobs.
Queensland Premier Peter Beattie has declared the region a natural disaster zone.