According to the Joint Australian Tsunami Warning Centre, the undersea earthquake struck at 6.38pm AEST on Wednesday. The centre said there was no tsunami threat to the Australian mainland, islands or territories.
The US Geological Survey said the quake was centred 33 kilometres beneath the ocean floor around 495 kilometres from the provincial capital of Banda Aceh.
Said, an official at Indonesia's Meteorology and Geophysics Agency who goes by only one name, said an Indian Ocean-wide tsunami warning has been issued.
"Earthquakes of this size have the potential to generate a widespread destructive tsunami that can affect coastlines across the entire Indian Ocean basin," the US Pacific Tsunami Warning Centre said.
Indonesia straddles a series of fault lines that makes the vast island nation prone to volcanic and seismic activity.
A giant 9.1-magnitude quake off the country on December 26, 2004, triggered a tsunami in the Indian Ocean that killed 230,000 people, nearly three-quarters of them in Aceh.
There is no tsunami warning in place for the Australian mainland.
