The cyclone was a maximum category five storm when it hit the coastal town earlier on Monday. Larry has since moved inland over the Atherton Tablelands.
Weather forecaster Cathy Muller said the storm was still packing winds of around 200 kph.
"They've eased for the coastal parts between Cape Tribulation (and) Ingham. In fact we don't have a warning out for the coastal parts at this stage," she said, adding that the storm is expected to continue weakening.
A flood warning is current for coastal rivers and streams between Innisfail and the southerly neighbouring town of Townsville, and authorities have warned of the threat of snakes and crocodiles.
Queensland Health spokeswoman in the regional centre Cairns, Rosalie Spencer, said no serious injuries were reported at any of the northern hospitals.
Several residents of the towns of Innisfail and Babinda needed stiches after suffering cuts and abrasions, and hospitals themselves survived with little more damage than broken windows and leaking roofs, however all have been operating on emergency power.
Trail of destruction
Earlier on Monday, Innisfail bore the full brunt of Cyclone Larry, with reports of many houses and crops destroyed.
Queensland Premier Peter Beattie, on his way to visit the devastated area, said around 55 percent of buildings in the town were damaged, and it could take up to a week for power to be restored to the town.
"Some have been flattened, roofs have been taken off," Mr Beattie told Macquarie Radio.
"The property damage has been immense ... powerlines are down and it will take days to replace them because of the damage. We haven't had a cyclone like this for decades, if we've ever had one like it before."
The Australian Defence Force is deploying helicopters to the region to assess the damage and also to fly in medical teams to help locals.
A Navy Seahawk and three Army Black Hawk choppers will also be on stand-by to provide support.
Damaged crops
Queensland farmers have suffered huge losses from Cyclone Larry, with most of the nation's banana crop destroyed and sugar cane fields flattened.
Up to 4,000 people are likely to lose their jobs after the storm destroyed bananas worth A$300 million.
The price of bananas is expected to rise with shortages stemming from the destruction.
"The banana crop in north Queensland has been decimated, probably between 90 and 100 per cent of the total crop is on the ground," Australian Banana Growers Council president Patrick Leahy said.
"There's going to 3,000 or 4,000 unemployed within the next week," Mr Leahy said, adding there would be a follow-on effect for the whole region. Australia does not allow banana imports because of biosecurity risks.
Cane farmers also appear to have suffered big losses from the storm, but growers are hoping many of their hardy plants will bounce back after being flattened by Larry's destructive winds.
Flattened cane can survive, but plants which have snapped cannot recover.
Farmers are still assessing the damage, but early estimates suggest heavy losses in the Innisfail area - a cruel blow to growers experiencing some of the best prices in years.