The tropical low in the Gulf of Carpentaria is set to make landfall near Borroloola in the early hours of Monday morning.
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The Bureau of Meteorology said there is a high chance of tropical cyclone formation over Gulf of Carpentaria waters on Sunday.
A watch zone has been extended from Karumba to Nhulunbuy, including Mornington Island, Borroloola and Groote Eylandt.
The tropical low is sustaining winds near the centre of 35 kilometres per hour with wind gusts to 85 kilometres per hour.
The low is situated 365 kilometres north of Mornington Island and 295 kilometres east northeast of Groote Eylandt and is slow moving.
The system is expected to remain slow-moving during today before adopting a south-southwesterly track towards the southern Gulf of Carpentaria coast on Sunday.
The system is forecast to intensify into a category 2 tropical cyclone prior to making landfall about the southern Gulf of Carpentaria coast on Monday.
Gales could potentially develop about coastal and nearby adjacent inland communities between Nhulunbuy and Karumba, including Mornington Island, Borroloola Wollogorang and Groote Eylandt during Sunday or early Monday.
Destructive windswith gusts in excess of 125km/h are possible between about Borroloola and Mornington Island, including Centre Island on Monday, depending on the future track of the system.
Abnormally high tides are expected to develop about the Gulf of Carpentaria coast over the next couple of days. Large waves may produce minor flooding along low-lying coastal areas.
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Heavy rain with the potential to cause flash flooding is expected in areas around the Gulf of Carpentaria over the coming days. Flood Watches are current for Gulf of Carpentaria catchments.