Four Jetstar planes have been forced to turn around and return to Australia because of volcanic ash around Denpasar Airport.
The aircraft had been on their way to Bali to bring holidaymakers back but conditions worsened on Tuesday leading to the turnback and cancellation of four flights.
Two Jetstar planes were turned back by 6pm on Tuesday, but by 8.30pm another two had to return midway through a trip to Bali.
All of Wednesday's scheduled flights to and from Bali have also been cancelled, although Jetstar hopes to operate a limited number of recovery flights to return holidaymakers to Australia.
Virgin Australia has also cancelled its flights from Australia to Denpasar on Wednesday and will update customers on Wednesday morning on whether flights from Bali to Australia will go ahead.
"Virgin Australia remains ready to send aircraft over to Bali as soon as we receive advice conditions in the vicinity of Denpasar airport will be safe for flying," the airline said.
Both airlines have offered passengers scheduled to fly to Bali the option of travelling to alternative holiday spots.
There was a one kilometre-long lava flow and material thrown 750 metres in the air from an explosion from Mt Barujari on Tuesday, Indonesia's Natural Disaster Mitigation Agency said.
Spokesman Sutopo Purwo Nugroho says 13 evacuation posts have been set up for up to 248,000 residents who may need them.
The lava flowed towards the Koko Putih River, raising its temperature from 21 to 36 degrees, and creating a potential flood hazard.
Residents have been told to stay clear of the river, with the volcano proving more dangerous than previous eruptions in 2004 and 2009.
